Savers urged to check their money is covered

Updated: 

Matt Morton/PA Wire


The Financial Services Compensation Scheme (FSCS) chief executive says consumers should be reassured by the scheme, but savers are nevertheless being urged to check that all their money is covered by the scheme.

The call comes after the world's major central banks announced emergency measures to stave off another credit crunch.
The Financial Services Compensation Scheme (FSCS) covers current and savings account holders' money in the event of a bank collapsing, up to the value of £85,000.

Banking licence

That limit applies only to the savings someone holds with all institutions operating under one banking licence however – and some providers share a licence. With plenty of bank and building society takeovers and mergers over the past two years groups sharing the same licence have changed.
Mark Neale, chief executive of the FSCS, said: "In these uncertain times consumers should feel reassured that the FSCS will continue to be there for them. All cash up to £85,000 for individual accounts and £170,000 for joint accounts is safe, as long as you do not exceed these limits for institutions authorised by the FSA.
"If you are not sure then check your money is protected."

Who shares licences?

Halifax, Bank of Scotland, Birmingham Midshires, the AA, Intelligent Finance and Saga, for example, all operate under one banking licence, so savers would only be covered for up to £85,000 in total across all those brands.
And in the past 12 months, Yorkshire building society has acquired Norwich and Peterborough building society and the savings accounts from internet bank Egg. It already shares a licence with Chelsea and Barnsley building societies, meaning savers with money in any of these institutions should make sure it doesn't exceed the £85,000 limit.
The FSCS says that the recent takeover of Northern Rock by Virgin will not affect the compensation limits for savers with money in both. When the sale goes through on 1 January next year, when both organisations will maintain separate banking licences. This means savers who have money with both banks will be covered up to the existing compensation limits for each.

To check which institutions share the same licence and ensure your savings are adequately protected you can check the Financial Services Authority table here.

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