The Financial Services Compensation Scheme (FSCS) is the UK’s statutory fund of last resort for customers of financial firms, and can pay compensation to consumers if a firm is unable to pay claims against it.
Currently under the FSCS, customers with bank/building society deposits are protected up to £85,000 per person, per institution. However, from 1 January 2016 this limit is set to reduce to £75,000.
This change is due to the strength of the pound against the Euro, as the compensation limits are set at €100,000 across the whole of the European Union.
The limits are reviewed every five years and based on average exchange rates over the period. The Euro has fallen significantly against the pound this year due to the European debt crisis and the problems in Greece.
The new limit will still protect the majority of individuals, however, some savers now have a short period of time to review their accounts and potentially re-organise their arrangements in line with the new limits to obtain the full protection.
How Nelsons Can Help
Phil Terry is a Independent Financial Adviser in Nelsons’ Investment Management Team. For more advice or to comment on this article please contact Phil on 0800 024 1976 our via our online form.