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How safe are your savings?

Esther Shaw / 24 April 2019 ( 16 May 2022 )

How safe are your savings? We look at what could put the amount of compensation you could receive if your bank goes bust at risk.

Money and a padlock to represent keeping your savings safe
The amount of compensation you could receive if your bank goes bust has fallen to £75,000

Savers are being urged to familiarise themselves with the Financial Services Compensation Scheme (FSCS), as if they are not careful, some of their hard-earned cash could be at risk.

Here we take a look at how the FSCS scheme works.

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What is the FSCS scheme?

The FSCS scheme is a safety net that protects depositors if their bank fails, taking their cash with it.

The system offers cover on savings up to £85,000. This limit was reduced to £75,000 in 2016, but was raised back to £85,000 in 2019.

Can you keep savings in different pots to protect yourself?

As a saver, you must decide whether to move some of your money in order to remain fully protected. 

Be aware that you may face penalties or lose interest if you move your money about, so factor that into your decision. 

Savers need to be aware that while they can save up to the FSCS limit in each separately registered bank, some banks share a banking licence.

For example, brands such as the Halifax, BM Savings and Bank of Scotland have the same licence. This means the new compensation limit of £75,000 will apply to the combined savings with those brands as they are part of the same group: Bank of Scotland.

By contrast, you would be able to hold £85,000 with Santander and £85,000 with NatWest, and the full £170,000 would be covered, as these are separate banks.

The key advice to savers is to spread your money around so that you don’t exceed the limit in any one account.

Talk to your bank

If you are worried about the safety of your money, you need to talk to your bank or building society.

The key is to ensure that you have taken the right precautions to give you the peace of mind of knowing that your money is safe.

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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.