How to protect your savings

Holly Thomas / 21 October 2014

Five ways to protect your money against your bank or building society running into financial difficulties.



The Financial Services Compensation Scheme (FSCS) guarantees savings up to £85,000 in banks and building societies which run into financial difficulty.

But those given a lump sum, from perhaps the sale of a house or a pension payout, risk losing their money over and above the threshold.

So how can you protect your savings? Here are five things to remember:

1. Keep each account within the limit

The sum protected by the FSCS rose from £50,000 to £85,000 at the end of 2010. Anything over £85,000 is not covered. If you haven't visited your savings account for a while, check interest payments haven't bumped you over the limit. 

Equally, for a new deposit, consider paying in less than £85,000 to allow for interest payments. Better to be safe than sorry.

Switch bank accounts with our simple guide.

2. Watch out for banks that aren't covered

Every UK regulated bank comes under the FSCS scheme – but while most banks are regulated, including those owned outside Britain, such as Santander in Spain, there are some which are not.

A handful of such EU-owned banks come under a different compensation scheme where you rely on protection primarily from their own governments. This includes Triodos Bank or Handelsbanken, for example. 

3. Double protection for joint accounts

For joint accounts you can double the existing limit and hold £170,000 and still be covered within the limits of the guarantee.

Learn more about how to protect your savings with Saga here...

4. Don't get caught out by the name of your bank

The limit applies per institution and not per account. That means if you have cash in an easy access account and a fixed rate bond with the same bank totaling over £85,000, you would lose anything above that - if that bank went bust.

Crucially, you must remember that some brand names are often connected by a parent company as a result of takeovers and mergers. For example, Saga operates under the same licence as Birmingham Midshires (BM Savings), a division of Bank of Scotland.

5. Savings with the Treasury are full protected

Savings invested with National Savings and Investments (NS&I), for example, are protected in full, as NS&I is backed by the Government.

Saga Savings can help you make the most of your money - learn more here...

The opinions expressed are those of the author and are not held by Saga unless specifically stated.

The material is for general information only and does not constitute investment, tax, legal, medical or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.