After the credit crunch began to emerge in early 2008, money became a stong topic of conversation. By the end of 2008, the crunch was followed by recession, which caused savers to become increasingly concerned with the safety of money held in banks. This was magnified by the collapse of Icelandic banks, but as a result the government raised the level of protection on
savings accounts, which now offers a £85,000 savings guarantee per institution.
This means that all banks & building societies covered by the Financial Services Compensation Scheme will provide compensation of up to £85,000 per account per institution, which includes
fixed term bonds, current accounts,
cash ISAs and more. This is where you have to be careful, as many banks are owned by the same institution, therefore only offering one lot of compensation between these brands. For example, if you have £85,000 with Halifax, and a further £85,000 with Bank of Scotland, you will only be covered for one lot of £85,000, as these two banks fall under the HBOS umbrella which holds a single registration to the scheme. However, if you moved £85,000 to another account outside this institution, such as Santander, you would be covered for the full £170,000.
It is also worth remembering that joint accounts are covered for up to £170,000. This is a great savings guarantee, and offers you peace of mind when saving in difficult times.
