The Financial Services Compensation Scheme
Thanks to the near-collapse of some of Britain's biggest banks in 2008, the Government beefed up the Financial Services Compensation Scheme (FSCS), the state-supported safety net for savers.
Today, the FSCS guarantees 100% of the first £85,000 of cash savings per person per banking licence (including interest). Therefore, a couple with up to £170,000 in a joint account has all of this cash covered by the FSCS. However, this limit only applies until 31st December 2015.
From 1st January 2016 the maximum amount the scheme will protect will fall to £75,000 per individual (£150,000 per joint account) per banking licence. This is because the limit is reviewed every five years and must be the equivalent of €100,000, so as the pound is doing well against the euro the level must be adjusted. Those with deposits inbetween the limits have less than six months to decide whether to adjust their balances in light of the change.
While the FSCS limit is very important to get right to guard your savings it's also vital to understand that FSCS protection only applies 'per banking licence'. So you should always spread your cash across different providers. But that's easier said than done, as a single licence can cover several different banks, building societies or brands.
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Who owns whom?
To help you work out how safe your cash is we've compiled a list of the biggest British banking and savings providers, showing you who owns whom.
With hundreds of different institutions to choose from, we haven't listed them all here. Instead, we've concentrated on the UK's biggest brands.
Remember, you get only one lot of £85,000 of FSCS protection per person (£75,000 from 1st January 2016) for the total amount you hold across these banking licences.
HBOS (Halifax/Bank of Scotland group)
- Bank of Scotland
- Birmingham Midshires
- Capital Bank
- Intelligent Finance
Lloyds Banking Group
- Cheltenham and Gloucester
- Lloyds Bank
Despite HBOS being acquired by Lloyds Bank, both HBOS and Lloyds Banking Group continue to operate under separate banking licences.
TSB has its own banking licence now.
- Barclays Direct (formerly ING Direct)
- Standard Life
- First Direct
Royal Bank of Scotland (RBS)
Royal Bank of Scotland
Coutts & Co
Please note that RBS subsidiaries NatWest, Ulster Bank and Coutts all have their own, separate banking licences and are not covered by the RBS licence. So savings up to £85,000 (£75,000 from 1st January 2016) with RBS and the same sum with NatWest, Ulster Bank and Coutts, would be covered by the FSCS four times over allowing you to hold a total of £340,000 (£300,000 from 1st January 2016) across the brands with the protection.
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The Co-operative Bank
- Britannia BS
- The Co-operative Bank
Bank of Ireland UK
- Bank of Ireland UK
- Post Office
Clydesdale Bank PLC
- Clydesdale Bank
- Yorkshire Bank
- Nationwide BS
In 2014 the Cheshire, Derbyshire and Dunfermline brands were integrated into Nationwide. Customers who previously had accounts with these companies now have Nationwide accounts.
- Barnsley BS
- Chelsea BS
- Norwich and Peterborough BS
- Yorkshire BS
- Coventry BS
- Stroud and Swindon BS
- Castle Money
- Chesham BS (renamed Skipton BS)
- Scarborough BS (renamed Skipton BS)
- Skipton BS
Foreign banks and the FSCS
Some European banks accept British savings, but are not covered by the FSCS. Instead, under what's called the 'savings passport' scheme, some banks from the European Economic Area are covered by their home country's compensation scheme for savings.
The main one you might come across is the Dutch-owned Triodos Bank. It is covered by the Dutch equivalent of the FSCS up to a limit of €100,000 per person.
However, other banks from around the world with a UK subsidary are covered by the FSCS. These include:
- Axis Bank UK
- Bank of Cyprus UK
- ICICI Bank UK
- State Bank of India UK
Finally, the Government's own piggy bank, National Savings & Investments (NS&I), is also covered by the FSCS. However, we expect the Government would cover all deposits in NS&I, apart from in the severest of financial meltdowns.
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