How much money is covered by the Financial Services Compensation Scheme?

Posted - 02/05/12

In the United Kingdom, the Financial Services Compensation Scheme currently covers the following amount,

• £85,000 for each saver, for each financial institution they have saved in.

Therefore, to be fully covered you cannot have more than £85,000 saved within one financial institution. If you have more than £85,000 in savings, you can be fully covered by placing £85,000 or under, in two or more financial institutions. It should have noted that the scheme covers a financial institution and not a bank: financial institutions can own a number of banks; therefore, if you are investing over £85,000 in two or more banks, ensure that those banks are not owned by the same financial institution. If the two banks are owned by the same financial institution, then you will be only covered for £85,000.

You should probably place no more than than £82,000 in one financial institution: as interest is added to the initial deposit, it would rise above £85,000 - assuming you placed £85,000 into the account. Finally you should ensure that the financial institution is regulated by the FSA and covered by the Financial Services Compensation Scheme (FSCS) - not all banks operating within the UK are.