In response, the FSCS has raised the compensation limit from £35,000 to £50,000 per individual per authorised institution.

Although the news is good, it also is more complicated than it first appears, warns Kevin Whitmarsh, Financial Services Partner at Old Mill accountants and financial services.

“The guarantee is per financial institution, not per account and banks that share the same Financial Services Authority (FSA) registration number count as one financial institution.”

This means that if you have £50,000 saved in an Abbey savings account and £50,000 saved with Cahoot, as these two brands share the same FSA registration number, only the first £50,000 would be guaranteed.

But if instead you had £50,000 saved with Abbey and £50,000 saved with Lloyds TSB, the entire £100,000 would be guaranteed as they are different financial institutions.