The Bank of England is set to restore the savings protection limit to £85,000 per institution.

The Financial Services Compensation Scheme is a safety fund which provides individuals with a guarantee that their first £75,000 of savings in any UK-regulated bank account will be protected in the event of that financial institution going bust.

Now, the Bank of England has opened a consultation on raising this limit to £85,000 by 30 January next year.

What's the background to this?

Until 3 July 2015 the savings safety limit stood at £85,000 per person, per institution. It was then reduced to £75,000 to fall in line with the EU Deposit Guarantee Schemes Directive, which required an adjustment every five years for member state schemes to be equivalent to €100,000.

However, the EU directive also requires an adjustment where there is significant fluctuation in exchange rates.

Now, as a result of the UK's referendum vote on 23 June 2016 to leave the European Union, the Prudential Regulation Authority (PRA – part of the Bank of England) considers that the pound's fall – by more than 10 per cent – against the euro is so significant that the savings safety limit should be restored to £85,000.

Rates currently hover at around £1 = €0.86.

Can I respond to the consultation?

The PRA is inviting members of the public as well as firms for feedback on its proposals. It has published a detailed paper on the consultation and any feedback should be emailed to by Friday 16 December.

How can I find out if my savings are protected?

If you have more than £75,000 in savings, it's a good idea to spread the cash across different financial institutions to ensure your savings are protected in the unlikely event of a bank going bust.

But some banks such as Halifax and Bank of Scotland are linked – meaning you get just £75,000 protection in total across both.

Though other banks, which you'd think would be linked – such as Royal Bank of Scotland and NatWest – have separate £75,000 protection.

You can check how safe your savings are in our Safe Savings guide.