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06/10/07
Savings up to 35,000 now fully protected

In an attempt to restore consumer confidence in the UK banking system following the well reported problems with Northern Rock, the Financial Services Authority has announced a change to their rules that will see compensation limits for savings increased to 100% of the first 35,000. The change came into force on the 1st October 2007.

This increase means that, should a bank, building society or credit union go into default from 1st October 2007, an individual who has lost savings will be able to claim compensation up to 100% of the first 35,000. Anything above 35,000 is not protected under the FSA scheme.

Joint accounts holders are covered separately by the scheme and therefore could be eligible for maximum combined compensation of up to 70,000 per institution.

Chancellor, Alistair Darling, recently floated ideas for an overhaul of the compensation scheme for savers including increasing protection to cover deposits up to 100,000. But the new rules unveiled today fall short of .