Compensation Scheme slashed by 12%
Financial Services Compensation Scheme will be falling to £75,000 per person, per licence from 1st January 2016
Savers were dealt a blow earlier this month when it was announced that the Financial Services Compensation Scheme limit would be reduced from the current level of £85,000 per person, per banking licence, to £75,000 from 1 January 2016. After many years of highlighting this vital protection for savers, this latest announcement has taken many by surprise.
The new lower limit will be a real disappointment to those savers who have carefully split their cash to ensure maximum protection under the current Financial Services Compensation Scheme level. If they want to remain fully protected, this will be an administrative headache, not only with regards to withdrawing any excess funds, but also looking for a new home for the money.
In some cases, the alternative that is available may be paying a lower rate of interest, so savers could be out of pocket too.
That said, savers should take this change as an opportunity to review all their savings accounts to ensure they're prepared for the impending change to the limit but also getting the very best rates.
We're still awaiting the results of a consultation on fixed rates and whether those with balances in excess of £75,000 will be able to withdraw those funds and move the money elsewhere, to ensure it's protected under the new FSCS limit.
If you're concerned about FSCS and would like to discuss this further, do get in touch; If you have over £100,000 in cash savings and would like to arrange for this to be split to ensure full protection, whilst getting the best rates, one of our specialist savings advisers will be able to help on 0800 321 3581.