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More of your savings now protected under FSCS

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The Financial Services Compensation Scheme (FSCS) will now protect £85,000 of your savings, a £10,000 rise from the previous level.

The FSCS protects your current account and savings deposits should your UK-registered bank, building society or credit union go bust.

The protection limit is set by the EU at the equivalent of €100,000. The increase is down to fluctuations in the pound.

The compensation level was reduced to £75,000 with effect from January 2016.

The FSCS limit of £85,000 applies per person, per banking licence. So if you have multiple savings accounts with the same provider or providers under the same banking licence, such as Halifax, BM Savings, and Saga, which are all part of HBOS, only up to £85,000 of the total amount is protected.

Joint account holders each have their own limit so joint accounts have a protection limit of £170,000.

Savings providers have until the end of June to alter their marketing material so some still may incorrectly say the FSCS limit is £75,000.

Gareth Shaw, head of Which? Money Online, said: “It’s good to see that more of savers’ cash will be protected and that there is a safety net in place should the worst happen. However, our research found that many aren’t aware of the protections in place. Financial providers, the regulator and the FSCS itself should be doing more to help people understand how their money is protected.”

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