Maria Goodall from the Financial Services Compensation Scheme (FSCS) explains how you can keep your hard-earned savings safe.
We know with the tough current economic climate everyone is having to make their money work harder and stretch further than ever. It can be daunting to think about the best ways to protect your finances. We all want to make sure our hard-earned money is safe, whether you’re saving for a holiday or planning for your future. There are a few simple but important steps you can take to make sure that if the worst happens, your money is protected.
1. Visit the FSCS website and use our Bank and Savings Protection Checker to find if the financial firm you’re dealing with is covered. We also have protection checkers for other financial products, including pensions and investments, as well as products offered by mutuals and friendly societies.
2. Keep an eye out for the ‘FSCS Protected’ badge. It should be displayed by all regulated deposit-taking firms (the banks, building societies and credit unions that hold your money) – this may be in branch, on their website, or in a banking app.
3. Make sure any savings you have in your account don’t exceed the compensation limit of £85,000 per person per financial organisation. If you do have more than this, it could be at risk if the firm goes out of
business. We can also cover temporary high balances of up to £1 million – like money from a house sale or inheritance – for six months from the date the money is credited into your account.
4. If you have more than one savings account held with different providers, make sure you check if any of them are part of the same group as they could share a banking licence. If they do share a banking licence, any savings you have across all providers would only be protected up to £85,000 in total, even if they all went out of business. The easiest way to check which banks share a licence is to search the Financial Conduct Authority’s financial services register to see what other names your bank might use or be trading under.
If you’ve got your money saved in an FSCS-protected bank, building society or credit union and it fails, you won’t need to do anything. We’ll automatically return your money up to the compensation limit either by cheque or electronic payment.
As well as savings, FSCS protection covers a range of financial products, including debt management plans, insurance, investments, and mortgage and pension advice. If you do need to make a claim, you can do so directly, and for free. You just need to make sure that the product or service you’re claiming about is regulated by the FCA or PRA. You can take a look at the full details on FSCS protection, compensation limits, and more on the FSCS website.
The Financial Services Compensation Scheme (FSCS) is an independent service that can pay compensation to customers when financial firms go out of business. FSCS protects many products and services including deposits, pensions, investments, insurance and financial advice. The service is funded by the financial services industry and so it’s free to use.
