Safety net has helped 4.5m savers

Pile of pound coinsThe savings safety net has paid out almost £26 billion to 4.5 million consumers since it was set up a decade ago.

The Financial Services Compensation Scheme (FSCS), which is celebrating its 10th birthday, said the sum equates to an average payment of £1,448 for each family in the UK.
The rules governing compensation have changed several times since 2001, with savings up to £85,000 being protected if a bank goes bust, compared with a limit of £31,700 in the autumn of 2007 when the run on Northern Rock happened.

Mark Neale, chief executive of the FSCS, said: "We have paid out compensation to people who had nowhere else to turn.

"Far greater protection now exists than was available in 2001. Consumers should feel reassured that in these tough times the FSCS will continue to be there for them.

"But it is vital that people check their money is with a Financial Services Authority-authorised institution to qualify for FSCS protection. Before taking out any new product you should always check with the provider that it is covered and that you will get your money back if the worst happens."

Over the last decade 2,528 covered institutions have collapsed. Of these, more than 2,000 were financial advisers.
© 2011 Press Association
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