As of 31 December this year, consumers’ savings will be protected up to the value of £85,000, according to changes to EU regulations.
The changes mean that more savings will be protected by the Financial Services Compensation Scheme (FSCS), which is the 'compensation fund of last resort for customers of authorised financial services firms'.
The EU directive that forced the UK to strengthen the protection for savers, ruled that member countries must guarantee the first EUR 100,000 in savings. This figure is expected to remain in place for five years.
The change in the rules will no doubt be welcomed by the nation’s savers, who are not getting the best deals at the moment in terms of interest rates due to the continuing low Bank of England base rates.
Anyone with much more than £85,000 in savings should spread their savings over several bank accounts, trying to ensure that no more than £85,000 is in each and that each savings provider is covered by the FSCS.
Sheila Nicoll of the FSA told The Guardian, "The need to maintain customer confidence in the banking system is one of the key lessons from the financial crisis."
Financial News
