How much are private savings covered up to?

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Q: In the event of a problem at a Bank how much are private savings covered up to?

A: As a consequence of Northern Rock’s plight there has been a slight amendment to the Financial Services Compensation Scheme rules. The compensation limit that now applies is £35,000 to each depositor for the total of their deposits with an organisation, regardless of how many accounts they hold.

Prior to 1st October 2007 the maximum level was 100% of the first £2,000 of your total deposits and 90% of the next £33,000, resulting in a maximum payment of £31,700.

The ongoing uncertainty in the banking world should serve as a further reminder that the banks and building societies that feature at the top of the “best buy” tables are not necessarily the most financially secure. Where larger amounts of money are involved, it can make sense to diversify and accept a slightly lower interest rate for increased security.

Answered by:

Jason Witcombe
IFA
Evolve Financial Planning