Savings safety net extends £85,000 compensation limit to more products

The UK’s savings safety net has extended a £85,000 compensation limit which already applies to bank and building society accounts across more of the financial products it covers – giving people higher levels of protection.

The Financial Services Compensation Scheme (FSCS) pays out to customers when financial firms are unable to, such as in cases when they have gone bust.

As well as protecting deposits of up to £85,000 held in banks, building societies and credit unions, the new higher limits cover investments, mortgage advice, life and pensions advice, debt management and long-term care insurance.

Some previous product limits had been set at £50,000 – so the new £85,000 limit per person, per firm, gives people more financial protection.

The new limits, which follow a consultation, apply to claims against firms that fail on or after April 1 2019.

Customers of firms that are declared by FSCS to have failed before April 1 2019 will be covered up to the previous £50,000 limit.

Mark Neale, FSCS chief executive, said: “Increasing our limits for the wide range of products and services that we cover further strengthens financial confidence and means people will have protection for more of their money.

“People can be assured that if they lose money as a result of the failure of their investment provider or adviser, their mortgage adviser, their debt management provider, or their long-term care insurer, FSCS can now provide a higher level of protection.”