Good news for savers as the limit of guaranteed savings protection is increased.
Savings of up to £85,000 will be protected should a bank or building society collapse; a £10,000 increase from the previous level of £75,000. The changes were introduced on January 30th of this year, which means that the new rules are now in effect. The Financial Services Compensation Scheme (FSCS) will reimburse any losses incurred, as directed by the Prudential Regulation Authority, a regulator belonging to the Bank of England.
Why The Increase?
The limit was set by a European directive, which stands at €100,000 across many European countries, including the United Kingdom. The limit did stand at £85,000 when it was agreed in 2010 (this was equivalent to €100,000 at the time). This was reduced to £75,000 in 2015 following a strengthening of the pound against the euro. Now, following the recent decline of the pound, the figure has been revised and increased to the previous amount.
Who is Affected?
The protection is valid for any cash in current accounts, savings accounts and cash ISAs. Individuals are covered for £85,000 per institution, with joint accounts being covered for £170,000. The chief executive of the FSCS, Mark Neale, said:
“The limit increase will protect even more of peoples' savings. The new limit will protect about 98% of people so it is worth people knowing their limits."
For more information on the savings protection increase, head over to the BBC website.
