Did you know that the compensation limit for UK savings accounts changed on 1st January?
If not, you are not alone. Recent research has found that only around half of UK consumers knew that the limit changed on 1st January, 2011 to provide increased protection for the holders of the top savings accounts.
Banking compensation limit rose on 1st January
Before 2011, the Financial Services Compensation Scheme (FSCS) offered UK consumers protection for the first £50,000 of their savings (£100,000 for joint accounts) in the event of a bank collapse. However, in line with other European countries, the limit was raised on 1st January 2011 to €100,000 (around £85,000). The limit is doubled for joint accounts.
This amount will be fixed for the next five years.
UK consumers unaware of change
Even though the limit has only recently been raised, a recent poll found that less than half of UK consumers were aware of the change. 52.2% of those surveyed knew the current compensation limit but were unaware of the change.
We at compareandsave.com welcome the decision to raise the level of compensation payable under the Financial Service Compensation Scheme. We believe that this will give additional confidence to savers who, thanks to low interest rates and concerns over the stability of financial institutions, have had a rough time over recent years.
Make sure you protect your cash
To maximise your protection, when you compare savings accounts to find the top savings accounts, you should make sure that you spread your cash between banks.
While the compensation limit was raised in January in line with EU legislation, you should remember that the limit is ‘per institution’. With many takeovers and mergers having taken place in the last few years, it is vital that you make sure you maximise your protection by picking the best savings accounts from different providers. For example, Santander now incorporates Abbey, Alliance and Leicester and Bradford and Bingley; all popular places that savers have previously invested their cash.
