Which Banks Are Connected?
If your bank goes bust, a government scheme will compensate you for loss of savings up to a maximum of £35,000. But the scheme isn't per account, it's per banking licence. We reveal which banks operate under the same registration.
This article has now been updated to include changes arising from the recent takeover of Bradford & Bingley's savings business by Santander, and information on the increase in protection offered by the Financial Services Compensation Scheme. This amendment to the FSCS, which will raise the safe savings limit from £35,000 to £50,000 per financial institution, is due to take effect from Tuesday 7 October, 2008.
Below, we reveal the big name savings providers that are grouped together under the Financial Services Compensation Scheme's (FSCS) rules. Avoid having more than £50,000 saved in any of the 10 groups listed here in order to make sure you aren't caught out in a crisis.
So, to be clear: you could have £50,000 with Yorkshire Bank in group 4, £50,000 with Royal Bank of Scotland in group 5, and £50,000 with Abbey in group 8.
However, if you had £50,000 with Abbey and £50,000 with Bradford & Bingley, only one of those £50,000 deposits would be safe under the FSCS.
(1) Lloyds TSB, Cheltenham & Gloucester
(2) Halifax, Bank of Scotland, Birmingham Midshires, Saga, The AA, Intelligent Finance
(3) The Co-Operative Bank, Smile
(4) Yorkshire Bank, Clydesdale Bank
(5) Royal Bank of Scotland, Direct Line
(6) Bank of Ireland, Post Office
(7) HSBC, First Direct
(8) Abbey, Cahoot, Bradford & Bingley
(9) Barclays, Woolwich
(10) Newcastle Building Society, BMW Savings
One exception to this rule is NatWest, which - although owned by Royal Bank of Scotland - runs as a separate institution. Having money saved with NatWest won't affect any savings you might have with RBS or Direct Line should problems arise.
If you're still not 100% sure about your own situation, take a look at a website called How Safe Is Your Money? Input how much cash you have put by, where you've saved it, and the website's tool will calculate how much of your money you might lose if your savings providers went under.
Finally, some good news: if you have joint savings accounts with a partner or spouse, the FSCS's guarantee is doubled to £100,000 per institution. Remember, though, that this is common sense rather than kind-heartedness - twice the protection can only be offered to twice the number of individuals, so it only applies if your account is officially in two names.