Partner Article

The Financial Services Compensation Scheme: an Introduction

In the UK today many of us are working and saving hard to provide for ourselves and our families which, particularly with the current condition of the economy, is proving tough for most of us. Knowing that you have a sum of money on which to fall back upon in case of an emergency gives you a feeling of security – but what happens if your savings disappear overnight?

In 2007 customers tried, in their droves, to withdraw their savings from the Northern Rock Bank in a panic having discovered the bank was unable to find financial support, in the hopes of rescuing their hard earned cash from dissolving into nothing. How can we protect against such a negative turn of events and ensure our finances are safe?

There is a little known Government backed scheme available to everyone, for free, whose purpose is to automatically secure savings if anything should happen to your bank, building society or credit union: The Financial Services Compensation Scheme (FSCS). Offering compensation for any losses as long as:

• Your savings amount to less than £85,000
• Your savings are held with banks, building societies or credit unions authorised by the Prudential Regulation Authority (PRA)

You might not qualify if:

• Your savings are with banks, building societies or credit unions which are not authorised by the PRA
• Your savings amount to more than £85,000 as an individual or more than £170,000 in a joint account
• You have more than £85,000 (or £170,000 in joint accounts) split across banks, building societies and credit unions which share a banking authorisation

Around 98% of the UK’s population qualify for the FSCS having less than £85,000 in savings and so far the scheme has helped more than 4½ million people in its 10 years of life, having paid out more than £26 billion in compensation.

To check if your savings are held in one of the 900+ banks protected by The FSCS use the FSCS Savings Protection Checker for peace of mind.

For more information visit the Financial Services Compensation Scheme website: http://www.fscs.org.uk/

This was posted in Bdaily's Members' News section by Micaela Levachyov .