Is your money safe with banks?

You are on track with your savings and investments plans. You also have different bank accounts for your money. What's more, your mortgage is from another provider and you use different apps to invest and manage your pension.

Think about this - what if the bank or investment platform goes bust (like this one), how much can the UK government pay you back to protect some of your hard earned cash? 

The FSCS is a scheme you may have recognised on banks website, investment websites, emails and more. What are they trying to tell you? How can you make a claim and how much protection do you actually have? 

Trivia: Imagine you have £50k in Lloyds bank and £50k in Halifax, how much of your money is protected? Hint: not all of it.

The Financial Services Compensation Scheme (FSCS) formed in 2001 is a free resource which acts as an independent body that protects customers of financial firms that fail. The FSCS covers:

• Savings 
• Bank accounts
• Pensions
• Insurance 
• Investments
• Mortgages
• Bad financial advice

How much of your money is protected?
Source: FSCS

Money held in banks or building society

• up to £85,000 per eligible person, per bank, building society or credit union.
• up to £170,000 for joint accounts.

Money in Investments 

• Investment provision is now £85,000 per person per firm
• Investment intermediation* is now £85,000 per person per firm

Mortgage 

• Home finance intermediation* is now £85,000 per person per firm

*Intermediation is when an entity works on your behalf to get you financial products

Your Pensions

• Life and pensions intermediation is now £85,000 per person per firm

Your Debt

• Debt management is now £85,000 per person per firm

Insurance

• Long-term care insurance is now 100% of the claim per person per firm

What if I have more than £85k?
Based on my research you may to have distribute the excess of your money across different banks and or platforms to be fully protected. Sometimes, this can be expensive due to the fees that could be paid. This also also be difficult to manage over time as you cannot exceed 85k in total (capital + interests or dividends). Alternatively you can trust that the provider is taking the right steps to protect your money and is in alignment with the Financial Conduct Authority (FCA) rules.

How do you make a claim?
To make a claim, click here to find out if you are eligible.

Remember: Your money is safe with FSCS up to a limit.

​Your checklist

1. Make sure your money is held in companies that are enrolled in the FSCS scheme. Ask your provider or use the FSCS checker to know for sure: Some companies have subsidiaries or banks that share the same banking license. The savings guru gives this great example - if you have 50k saved with Lloyds Bank and 50k with Halifax, you'll only get the 85k protection as both companies share the same license.
2. ​Remember that this limit applies per person, per bank/financial institutions
3. Not all financial products are covered so check carefully before you sign up

FSCS Protection Checker

A 2 min video on FSCS