Savers Compensation Limits – 5 Rules for Spreading your Savings Around

Savers Compensation Rules Changed 31 December 2010

Savers Compensation Limits changed on the 31st December 2010

Spread your Saving Around – £85,000 here and £85,000 there!

The economic downturn of 2008 had a major effect on the banks and the amount of money you could safely save with them under the savers compensation scheme. The government had nationalised two British banks in 2008 , the Northern Rock and the Bradford & Bingley. The savings accounts from the Bradford & Bingley were passed to the Abbey Bank which is owed by the Spanish Bank Santander when the government took over the Bradford and Bingley. The government has also bailed out the biggest bank in the UK the Royal Bank of Scotland (RBS) Lloyds TSB and the Halifax by investing billions in each bank. Lloyds TSB looks set to merge with the Halifax Bank.

The British government stood by its savers compensation pledge in 2008 and protected British investors. For the first-time the Financial Services Compensation Scheme (FSCS) had been tested when the British government stepped into protect British investors when I-Save the Icelandic Bank that went Bust. It is understandable that people are now very confused and concerned about the safety of their savings and where to invest.  At the time investor with savings of more than £50,000 knew that they were protected with the savers compensation and they were lookiing to spread their savings around the UK banks and building societies to protect themselves.

Savers Compensation Rules Now Protect Up To £85,000

Originally in 2008 you were covered by the Financial Services Savers Compensation Scheme in any UK bank up to £50,000 per customer per bank.  Should you have more than £50,000 it was a good idea to spread your money around the UK banks. It is important to be careful not to open two accounts in the same bank or two banks that are part of the same group as you may not be covered.

On December the 31st 2010, the Financial Services Authority (FSA) increased the savers compensation deposit guarantee limit from £50,000 to £85,000 per person.  This meant that all UK savers with £85,000 in an individual bank would be protected under a savers compensation scheme in the event that their bank or building society went bust.  This new ruling also protected couples with a joint savings account up to £170,000 in a UK bank or building society would be protected by the savers compensation deposit guarantee limit.

Savers Compensation Rules for Spreading your Savings Around

Rule One

Don’t invest your hard earned cash in foreign banks just because they have fantastic interest rates. Check that they offer a savers compensation scheme and ask how much you will be covered for  in the event the bank went bust

Rule Two

Spread your savings around the various UK banks and building societies to ensure taht you maximise teh savers compensation scheme and to protect your savings

Rule Three

Make sure that you only have one savings account in your name in each bank. Your partner can also have a savings account in the same bank in their name and still be protected.

Rule Four

Check that the bank is not part of a group of banks that will only cover you once under the Financial Services Compensation Scheme (FSCS) if you opened several saving accounts.

Rule Five

Don’t invest in a foreign country until you have checked that they offer you a depositor’s protection scheme (savers compensation scheme) and make sure you understand the limitations of how you can invest there and still be protected with them. If they don’t offer protection then don’t invest there.


Before investing check with the banks or building societies first and ask the right questions. The first question you should ask is whether you are protected by the savers compensation scheme ?

For external reviews and comparisons, please take a look at Internet Banks.  You can join the discussion below by leaving your comments regarding your thoughts about the savers compensation limits.

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