🔔 How is your money protected now that we have ended the Brexit transition?

Author: Anna Bowes
07th January 2021

Now that the transition period to exit Europe has ended, there have been some changes to the way some of your cash savings may be protected.

The good news is that you will continue to be protected and in the vast majority of cases there will be no change - but in some cases the protection may be different.

Money held in a UK branch with a UK provider

No change – eligible deposits will continue to be protected by the UK Financial Services Compensation Scheme – so up to £85,000 per person, per banking licence.

Money held in a UK branch of a UK Bank with an EEA/Foreign subsidiary parent

Some Banks with European parents, such as RCI Bank and the Bank of Ireland, pre-empted Brexit some time ago – and although their parent banks are European, they already have full UK Banking Licences and therefore funds deposited will continue to be protected under the UK FSCS.

There are also UK banks with other Foreign parents, such as Santander or JN Bank, for example. As above, these already and will continue to offer the protection of the UK FSCS as they are already fully authorised and regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) and therefore have a full UK Banking Licence.

Money held in a UK branch of a European Economic Area (EEA) Bank

The key provider in this group that appears in our Best Buy tables is Ikano Bank – and this is the group where the key change has occurred.

From 1st January EEA Banks that hold their customers’ deposits in the UK have become members of the UK FSCS – so, in the case of Ikano Bank, rather than being protected by the Swedish Deposit Insurance Scheme, the protection has now been switched to the UK scheme.

European Banks with European Branch

AgriBank is a good example of a Bank in this category. As this is a Maltese Bank and the funds are held in Malta, the protection will continue to be offered by the Maltese protection scheme as was the case before 1st January.

Similarly Moneycorp Bank which is currently offering a Best Buy 90 day notice account is licenced in Gibraltar, so funds with the Bank will continue to be covered by the Gibraltar Deposit Guarantee Scheme.

Both of these schemes offer protection on funds of up to EUR100,000 – so at the moment with the current exchange rate, this is higher than the £85,000 offered by the FSCS.

Money held in an EEA Branch of a UK Bank

Another situation that may affect some savers, are those who have deposits held in an EEA branch of a UK firm - perhaps because they have a property abroad. Before 31st December, these deposits would have been protected by the UK FSCS. However, this protection should have now been shifted to the EEA scheme that the branch is in - although according to the FSCS 'this will depend on the rules in each EEA jurisdiction'. So you should check with your bank if you are in this situation.

The FSCS goes on to explain that ‘Eligible deposits held in Gibraltarian branches of UK firms are treated differently and will continue to be protected by the FSCS after 31 December 2020.’

The main thing is that your money will continue to be protected

Although many of the providers that are listed on our Best Buy tables may not be names that you are familiar with, the majority are Banks with UK branches and a full UK Banking Licence and therefore there is no change.

Even if you do have funds deposited in savings accounts with Ikano bank, Moneycorp Bank or Agribank you will continue to have protection but it’s important to be clear who will be providing this.

Always check with your provider or by taking a look at our FSCS Guide for more information.