Follow our steps to how you can ensure your money is covered if a bank, building society or credit union goes bust.
The Financial Services Compensation Scheme (FSCS) can pay compensation if a bank, building society or credit union is unable to pay claims against it. The deposit protection limit from 30 January 2017 is £85,000 (though firms have until 30 June 2017 to update written customer information about this limit).
Depositors with some types of temporary high balances have FSCS protection up to £1m for up to 6 months from the date the account is first credited with the money.
There are 4 steps you should take to ensure all your money is covered.
Step 1: Know the deposit protection limits
Most money deposited with a bank, building society or credit union is protected under the FSCS up to a limit of £85,000.
This money might be deposited in a current account, savings account, cash ISA or savings bond.
The FSCS limit applies to each person, per authorised institution. This means each person in a joint account is protected, so two people would be covered for double the limit (£170,000) per authorised institution.
For a stocks and shares ISA, the compensation limits can be different depending on who you take out an ISA with. The FSCS has more on compensation limits for stocks and shares ISAs.
Step 2: Beware of multiple brands
The FSCS compensation limit applies to all deposits you have with an authorised institution, which may include several banking and building society brands.
If you have multiple deposit accounts with one bank, building society or credit union – or several accounts with different brands that come under the same authorisation – you will probably only be protected under the FSCS up to a total of £85,000.
You can check the tables of the main deposit-taking banking and savings brands and building society brands to see whether your money is held with a brand that shares its authorisation.
These tables show:
- the main banking and building society brands
- which authorised institution owns them or holds them as a subsidiary
- their firm reference number (FRN), which shows how they are authorised
- other brands that share the same authorisation and FRN, and therefore FSCS cover
Step 3: Check the Register
These tables do not include all banking or building society brands covered by the FSCS, or any credit unions. If your bank or building society is not included you should ask it where it is authorised and how your money is protected.
You can also check the Register to find out whether your bank or building society has several brands under the same authorisation. Search our Register under ‘financial services firms’, then click ‘names’ for a list of brands used by the authorised institution.
Step 4: Confirm cover for foreign banks
Many foreign-owned banks that operate in the UK have to be authorised by us, and money deposited with them will be covered by the FSCS.
However, a bank based in the European Economic Area (EEA) can offer certain products or services in the UK and other EEA countries while being authorised in its home country. The EEA includes the EU states, plus Iceland, Norway and Liechtenstein.
If you deposit money with an EEA bank it will be covered by the compensation scheme of the bank’s home country rather than the FSCS. This is up to a limit of €100,000 per person in EU countries.
The banking and savings brands table does not include banks authorised abroad. Check the Register to see if a bank is authorised in the EEA (it will say ‘EEA authorised’) and to find out if other brands come under the same authorisation – click on ‘names’ for the list.
How to complain about an EEA authorised firm
Step 1: Contact the firm directly
Any complaint should be taken up with the firm first. If you remain dissatisfied once you have received the firm’s response, you may be able to take your complaint to the Financial Ombudsman Service or equivalent.
If the firm has an establishment in the UK (eg, it has a branch here) then the firm will be covered by the UK Financial Ombudsman Service and it may be able to look into your complaint.
Some firms without a presence in the UK will have signed up to the ombudsman service’s complaints process. This is known as voluntary jurisdiction. However, not all firms have signed up to this process. If a firm hasn’t signed up, you will need to contact its home state regulator or that state’s equivalent to the Financial Ombudsman Service. The firm should tell you who this is.
The Financial Dispute Resolution Network also contains further information about ombudsman schemes in other EEA states.
Step 2: Contacting home state regulators
You can find out who a firm’s home state regulator is on the Register. You can view this information under the ‘regulators’ heading in the firm’s entry.
See the relevant contact details of EEU and EEA regulators.
If a firm is authorised in another EEA state, generally you will be covered by the compensation scheme of that country rather than the Financial Services Compensation Scheme (FSCS). Under our rules, incoming EEA firms are able to obtain top-up cover which may provide FSCS protection for their customers.
In this case, the FSCS will cooperate with the EEA firm’s home state compensation scheme. Compensation rules vary depending on the country the firm is authorised in, so ask the firm for specific details.