The UK deposit compensation limit will increase to £85,000 from today, 31 December, the Financial Services Authority (FSA) has confirmed.
The FSA said the limit, which applies per person per authorised firm, will rise to £85,000 from the previous £50,000 level. The new level is the Sterling equivalent of the compensation limit for the European Economic Area (EEA) which is €100,000.
FSA director of conduct policy, Sheila Nicholl, said the UK Financial Services Compensation Scheme (FSCS) would begin a publicity campaign in 2011 to raise awareness of the limit and the importance of consumers being aware of whether they are covered and by which national scheme.
“Alongside increasing the amount of depositor protection, raising awareness of the compensation scheme is vital,” she said.
The UK FSCS covers deposits with UK banks and the subsidiaries of foreign banks operating in the UK. However, deposits in branches of banks that are based in an EEA country will often be covered by the national scheme in the country where the bank has its headquarters.
The Dutch bank ING is registered in the UK as EEA Authorised so the compensation arrangements in the Netherlands would apply rather than the UK scheme.
An international banking group that has its headquarters outside of the EEA, such as the USA, but is authorised to operate in the UK by the FSA will be covered by the UK FSCS scheme.
The FSA has a register of all of the firms authorised to operate in the UK, available online.
The deposit scheme applies to institutions rather than accounts. So different accounts all operated by the same institution are not covered separately.
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