FSCS gives savers pan­demic life­line

The Daily Telegraph - Business - - Front Page - By Adam Wil­liams

SAVERS are to be of­fered beefed-up pro­tec­tion for their de­posits amid con­cern that the pan­demic has made bank fail­ures more likely.

Cus­tomers with a large bal­ance will be en­ti­tled to a re­fund for longer than the usual limit if their bank col­lapses, un­der the new rules from the Fi­nan­cial Ser­vices Com­pen­sa­tion Scheme lifeboat fund. Bosses at the FSCS said the ex­tra sup­port was in­tended to give cus­tomers re­as­sur­ance they would not lose out even if fi­nance com­pa­nies were brought down by the eco­nomic tur­moil un­leashed by Covid-19.

De­posits with UK banks, build­ing so­ci­eties and credit unions are pro­tected up to £85,000 per per­son un­der FSCS rules, mean­ing cus­tomers get a pay­out if their de­posit holder fails. There is ad­di­tional pro­tec­tion for cus­tomers who have tem­porar­ily high bal­ances of up to £1m – for ex­am­ple, to pro­tect those hold­ing the pro­ceeds of a house sale, a large re­dun­dancy pay­ment, a di­vorce set­tle­ment or an in­sur­ance pay­out.

Nor­mally this cash is pro­tected if it has been in a cus­tomer’s ac­count for up to six months, but the FSCS has ex­tended this cov­er­age to 12 months, it said yes­ter­day.

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