Big news for savers, and for once, it’s actually good news.
From 1 December, the rules around how your money is protected are changing. The FSCS protection limit (the scheme that steps in if your bank, building society or credit union collapses) is rising from £85,000 to £120,000.
Most people won’t be hitting that limit right now, but good saving habits can get you there sooner than you’d think. And even if you’re nowhere near it, it’s still important to know the rules.
At the moment, each person is protected for up to £85,000 per bank. Anything up to that amount would be repaid by the government if your bank went under. From December, that jumps to £120,000 per institution.
And remember – it’s per banking group, not per account. So you could have £120,000 in Barclays and another £120,000 in Santander, and you’d still be fully protected in both. If that’s already you, fair play – you’re doing something right.
There’s also a temporary protection of up to £1 million for six months. This covers short-term, high balances such as house sale proceeds or insurance payouts. Basically, if you suddenly end up with a large chunk of money for a genuine one-off reason, you’re covered while it’s parked in your account.
So keep an eye on your balances and split money between banks if needed. This increased protection will be a big help to a lot of people and, with all the rumours swirling about the upcoming Budget, a win is a win.
