Savers will have far more of their cash protected from next year if their bank or building society goes bust.

The existing 50,000 per person, per financial institution guarantee will rise to 100,000 on 31 December, the Financial Services Compensation Scheme (FSCS) has confirmed today (see the Safe Savings guide).

Based on current exchange rates, that equates to 84,400 of protection, though the exact Sterling amount will be set in the coming months, following a consultation

Whatever sum is chosen, it is likely to be rounded up or down to create a more memorable figure.

The amount is also likely to be reviewed every five years if the FSCS, the body that compensates consumers if a provider goes bust, gets its way.

The protection boost follows a European Commission (EC) ruling in July (see the Safety boost MSE News story). This still needed ratification by the UK authorities, which has now happened.

Martin Lewis, creator, says: "This is a welcome boost for savings safety and should leave people feeling more secure as it will leave all but the biggest savers, or those who've recently sold homes, covered."

Further reading/Key links

Best rates: Top Savings, Top Fixed Savings
Stay safe: Safe Savings
New rules: EU official statement, FSCS statement

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