Finance Services Compensation Scheme (FSCS) reduced

The deposit compensation limit protected by the Finance Services Compensation Scheme (FSCS) has been reduced to £75,000.

The FSCS protects deposits made by private individuals and small businesses to any authorised firms.

From 1 January 2016, the new deposit compensation limit will be £75,000, a reduction of £10,000 from the previous limit of £85,000.

The new changes mean that deposits are limited up to £75,000 for single accounts and £150,000 for joint accounts.

The FSCS covers any losses individuals and small businesses suffer as a result of their bank, building society or credit union failing. The deposit protection limit covers money in savings and bank accounts, cash ISAs and saving bonds per person, per firm.

However businesses may still receive a share of their savings above this limit following any distribution of assets as part of a bank failure. This would be a matter for the bank to decide and any money recovered would vary according to the circumstances of the failure.

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