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.

Martin Lewis
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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.

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