The Financial Services Compensation Scheme (FSCS) guarantee limit for savers is being increased to £85,000 from 31st December 2010.
This guarantee limit currently stands at £50,000 per individual, per authorised firm. The increase to £85,000 will bring the limit in line with the compensation level available across most of Europe.
For joint accounts, a total compensation limit of £170,000 will apply to savings.
From the end of the year, the FSCS will be able to provide compensation up to this new limit for savers where an authorised firm is declared in default.
Another important change to the system happening at the same time is that debts with the same authorised firms will not be deducted from the amount of compensation available.
Under the current rules, mortgages or overdrafts with the same institution are deducted from the value of savings before eligibility for compensation is calculated.
Photo credit: Flickr/Richard ‘Tenspeed’ Heaven
