Changes to the Financial Services Compensation Scheme (FSCS) for deposits and insurance based investments - 3 July 2015
It has been announced today that the FSCS protection on deposit savings will fall to £75,000. The current level of protection (£85,000) stands until the end of 2015, meaning there is still time to spread existing savings. The change comes under the European Union Deposit Guarantee Schemes Directive. It fixes a harmonised limit of €100,000 (or the equivalent) across Europe. The new UK limit is set today. There is good news for some consumers with higher balances, though. People with some types of temporary high balances will have FSCS protection of up to £1m for up to six months. Things like the proceeds from a house sale, inheritance and divorce proceeds will qualify for the new protection limit. So where we would have recommended clients split funds down, pending any financial advice, it may no longer be necessary. A final change us in relation to the protection limit on insurance based investments such as Investment Bonds; from immediate effect, this will be increased to 100%. Sources:
- http://www.fscs.org.uk/news/2015/july/new-deposit-protection-limit-coming-on-1-january/
- http://www.bankofengland.co.uk/publications/Pages/news/2015/056.aspx
SMHTFSCS/030715