The Treasury has revealed changes to the level of protection that savers will receive under the Financial Services Compensation Scheme (FSCS).
Under the European Deposit Guarantee Schemes Directive the UK has to re-set this level every five years bringing it into line with the 100,000 Euro threshold. From the end of December 2015 the level of protection under the Financial Services Compensation Scheme, per individual per institution will change from £85,000 to £75,000.
An institution is the authorised entity. Some banks and building societies have more than one high street brand under one authorised entity. Amongst the building societies: Yorkshire Building Society also operates the N&P, Chelsea and Barnsley trading names. National Counties Building Society also has the Family Building Society trading name.
Joint savers will have protection of £150,000 from 31 December this year.
Robin Fieth (pictured), chief executive of the Building Societies Association (BSA), said: “We might wish that this change wasn’t necessary, but understand that under EU law and as a reflection of the strength of the UK economy it is.
“We welcome that the UK Government has chosen to legislate to give consumers and firms a six-month lead-time. Looking ahead good staff training and consumer communication will be essential to ensure that savers are clear about what is happening.”