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Are Your Savings Safe?

Full guide to protecting your cash

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Martin and Money Team

Updated December 2017

Don't let your savings go under

The panic over the collapse of Northern Rock, Bradford & Bingley, Icelandic banks and others may seem a distant memory, yet every sensible saver needs to remember the lessons and ask "Are my savings safe?"

This is an account-by-account savings safety check-up, which shows what protection you have if the worst happens.

Six facts everyone should know

Before we get to the nitty-gritty, if you only remember six things about this, make it these:

  • You now get £85,000 protection per UK-regulated financial institution - up from £75,000

    All UK-regulated current or savings accounts and cash ISAs in banks, building societies and credit unions are covered by the Financial Services Compensation Scheme (FSCS).

    This limit used to be £75,000 but from 30 January 2017 it increased to £85,000 after the pound's post-Brexit fall prompted a review by the Bank of England. But this doesn't mean you'll get £85,000 for every account – the £85,000 is per financial institution. So if the bank fails, you'd get back up to £85,000 per person, per financial institution. The majority should get it within seven working days.

  • You've a temporary £1 million protection after 'life events'

    Rules introduced in July 2015 mean that savings of up to £1m may be protected for a six-month period if your savings provider goes bust.

    The increase is to cover life events such as selling your home (though not a buy-to-let or second home), inheritances, redundancy, and insurance or compensation payouts that could lead to you having a temporarily-high savings balance.

    The extra cover will apply from the date on which the money is transferred into the account, or the date on which the depositor becomes entitled to the amount, whichever is later. You'll need to prove where the funds came from in the event of a claim – and be prepared to wait up to three months for any cash over £85,000.

    You can read more about what qualifies as a 'life event' on the FSCS website.

    This change is a boon, because it allows you time to sort a plan for the cash. But, not only that, it also allows you to maximise savings by putting more cash into higher interest paying accounts than you'd otherwise be able to.

    How does the £1 million limit change my savings strategy?

  • Not all UK savings are UK-regulated

    Most banks, including foreign-owned ones such as Spain's Santander, are UK-regulated. Yet a few EU-owned banks opt for a 'passport scheme' where you rely on protection primarily from their HOME government.

    This includes Fidor, RCI Bank and more. See the foreign banks list for full details.

  • The amount's double in joint accounts

    Cash in joint accounts counts as half each, so together you've £170,000 protection.

    If you've an individual account with the same bank, half the joint savings count for your total exposure, and any amount over £85,000 isn't protected. For more info, see the joint accounts protection below.

  • An institution is NOT the same as a bank

    The protection's per institution, not account. So four accounts with one bank still only get £85,000. The definition of 'institution' depends on a bank's licence and giant banking conglomerates make it complex.

    For example, sister banks Halifax and Bank of Scotland's accounts are only covered up to £85,000 combined. RBS and NatWest are also sisters, but their limits are SEPARATE. See the What Counts As A Bank? tool below.

  • Spread savings to keep 'em safe

    For perfect safety, save no more than £83,000 per institution (the extra £2,000 gives room for interest). Spreading can be worth it even if you've under £85,000; if your bank went bust, the money could be inaccessible for a spell. Using two accounts mitigates the risk.

    For a full list of top accounts, see our Best Buy Savings guide. Or for how to save safely, including dealing with very big amounts, see 100% Safety below.

What does the FSCS cover?

The Financial Services Compensation Scheme (FSCS) only applies to organisations regulated by the Financial Conduct Authority (FCA). This was the big problem with failed Christmas savings scheme Farepak, as it had no protection whatsoever. When it went bust, the money was gone.

The main categories of protected savings are:

  • Bank and building society accounts

    All UK credit unions, bank or building society savings accounts, current accounts and small business accounts are covered to some degree by the FSCS.

    Certain types of guaranteed equity bonds, 'deposit accounts' where the interest paid depends on the stock market's performance, may also count for 'savings' protection.

  • Any cash saved within a SIPP pension

    If you have a self invested personal pension and are keeping some of the money in cash savings there (as opposed to investment funds), then you get the full FSCS savings protection on that, separate to any investment protection (read full details).

    SIPP providers will tell you which banks are holding your cash, so you can check if it's linked to any others you have savings with (see linked banks table below).

  • Any cash ISA (including Help to Buy ISAs)

    These are simply tax-free savings accounts, so they have the same FSCS protection as any other savings accounts. This includes the cash ISA's forerunner, the Tessa-Only ISA (Toisa). Plus the ISA money will retain its tax-free status if the institution it's held in goes bust.

Am I protected if my investment company goes bust?

Am I protected if my insurance company goes bust?

What's not covered – saving stamps, clubs, loyalty points and more

How does the protection work?

Bank and economy collapse All UK-regulated deposits – including money saved and accumulated interest – in bank or building society savings products, are covered by the FSCS.

This is an independent fund set up by government and regulated by the FCA, which promises that, in the event of a bank collapsing, you get some of your money back, though it's likely you'll lose access to the cash while compensation is being dished out.

This applies to everyone, no matter their age (including children), or where they live. Provided the bank is registered in the UK, crucially:

100% of the first £85,000 you have saved, per financial institution, is protected.

The biggest issues here are what counts as an institution? and what's a UK-regulated institution? (see later for both). But they're not the only ones... (click to open/close)

The rates were different before February 2017

The limit's doubled in a joint account

The threshold includes interest as well

Savings are separate from debts

Protection won't be paid out instantly

Offshore accounts aren't usually covered

What counts as a 'financial institution'?

There's no easy definition. Over the years, many banks have merged or been taken over, blurring the lines as to what counts. Technically, it's all about the company's registration at the regulator, the FCA.

This can leave some strange results – for example:

  • Put money in the Halifax, Bank of Scotland and BM Savings, all part of the same group, and the protection limit is combined. You'd only get £85,000 altogether.

  • Put money in the Royal Bank of Scotland, NatWest and Ulster, which are all part of the giant RBS conglomerate, and you get separate £85,000 protection for each of the three banks.

Which banks are linked?

Find out if your bank shares its savings protection

Please enter a valid bank.

Please select a bank.

We checked the FCA registration number on each bank's website. If an institution isn't listed, it doesn't mean it's not protected. Last full update: April 2017.

This bank isn't linked to any others, for savings safety purposes

This means the £85,000 per person protection isn't shared between any other banks.

These banks/building societies all share one lot of £85,000 protection
  • {{bank}}

This means, if you have accounts with more than one of these, you should check how much it is and be aware of how much is protected.

These banks/building societies all share one lot of £85,000 protection
  • {{bank}}

This means, if you have accounts with more than one of these, you should check how much it is and be aware of how much is protected.

Warning! Due to ongoing or recently completed mergers, the full situation with these companies is slightly more complex. Read full details

These banks are not protected under the UK FSCS scheme.
  • {{bank}}

Instead you would have to claim money back from their home country's compensation scheme, if anything happened. Read full details

Your money in NS&I is 100% protected
  • {{bank}}

As NS&I is government backed, all the money you save in here is covered fully. There's no sharing of licences, it's just 100% safe, up to any amount.

Icesave went bust in 2008, and the UK FSCS repaid all savers cash.
  • {{bank}}

For full details of what happened when Icesave went bust, please read the Icelandic Bank Collapse Info

This bank isn't linked to any others, for savings safety purposes

This means the £85,000 per person protection isn't shared between any other banks.

From January 2012 Virgin Money completed the purchase of the savings arm of Northern Rock. For the moment both have separate FSCS protection, but later in 2012 they will merge. So be careful if you have savings of more than £85,000 across the two providers. Read details


What about bank takeovers?

If your bank's been taken over, your exact protection can depend on the date you opened a savings account. Here's a merger-by-merger guide:

Lloyds Banking Group, Halifax and TSB

Santander (Alliance & Leicester and Bradford & Bingley)

Virgin Money and Northern Rock

Barclays and ING Direct

Marfin Laiki Bank and Bank of Cyprus UK

AA Savings and Bank of Ireland UK

What if my building society has merged with another?

In the aftermath of the financial crisis, a spate of building society takeovers peppered daily news broadcasts. Initially, the Government acted to protect savers who had money stashed in two different building societies that merged, but that ended in December 2010.

So, if you have money in more than one of the institutions contained within the following groups, you now only have £85,000 protection across that group.

  • Co-operative Bank and Britannia
  • Nottingham and Shepshed building societies, trading as Nottingham BS
  • Yorkshire, Chelsea, Barnsley, Norwich & Peterborough building societies, plus Egg.

Nationwide used to share its protection with Cheshire, Derbyshire and Dunfermline Building Societies, but all products held with the three smaller building societies are now Nationwide branded. The same is true of Coventry BS and Stroud & Swindon BS - any old S&S accounts are now Coventry branded.

What about saving with foreign banks?

There are lots of overseas-owned banks operating in Britain, including Santander, ICICI and Yorkshire Bank. Providing they're not 'offshore' accounts (which are very different), it's usually irrelevant who their parent company is.

They're UK-regulated banks, so you get the same £85,000 per person protection. Yet there's a subtle extra dimension...

If a bank gets into trouble, it's to be hoped there'd be a bailout which didn't affect savers, so all your money's protected (though that of course isn't guaranteed). This didn't just happened with UK-owned Northern Rock and Bradford & Bingley, but also with Iceland-owned (but UK-regulated) Kaupthing Edge (see more on the Icelandic Bank Collapse).

Where possible, always keep your cash within the £85,000 limit, as it's an aim but not a promise to bail out banks that fail. However, this is particularly true with non-European banks, as this has not been tested yet (and hopefully won't be!).

Some European banks may NOT be UK protected...

It is possible for a bank to be operating in the UK with the FCA's full approval, yet the protection you get is not provided by the UK Financial Services Compensation Scheme. It's not banks owned in far-flung countries you need to watch, but European-owned banks.

That's because banks from the European Economic Area are allowed to opt for a slightly different protection, called the 'passport' scheme, which means if they went bust, you'd have to claim money back from the bank's home country's compensation scheme.

Banks from outside Europe can't do this, and therefore if they operate here have full UK compensation.

Save with one of these, and all your savings safety depends on the stability and solvency of a foreign government or their financial regulator.

Of course, some countries may be more financially stable than the UK, but remember you're then reliant on a government you don't have a vote for to actually choose to pay out.

On a positive note, since 2010 all European countries have been required to have a compensation limit of €100,000 (the UK uses £85,000 as we aren't in the euro).

If you have savings in a European bank that's currently fully covered by the FSCS, and it then decided to opt for the 'passport' scheme, it would have to inform you of the change.

One final note. It's possible for a European bank to operate in the UK using only its home compensation scheme, even if that's lower than the UK scheme, so you'd be eligible only for that amount. In this situation, the foreign bank will not be FCA-regulated but it may still be regulated by its government's own protection scheme.

Accounts from these banks occasionally offer higher rates than UK-protected ones - if this is the case, we'll mention it in our Top Savings guide.

With non-UK regulated examples like these, bear in mind it may be harder to get your money back if anything did happen to the bank.

Does Brexit have an effect on passporting?

Which banks does this apply to?

Here's a list of the big non-UK savings banks and smaller top payers that have been in our best buys over the past few years.

Overseas banks with savings accounts in the UK
100% protected by FSCS (No passport exemption) Not covered by UK FSCS (Passport-exempted)
Allied Irish Bank (UK) (Allied Irish) Agri Bank
Asda (Santander) Anglo-Irish Bank / IBRC (see note below)
Bank of Cyprus UK Ikano Bank
Bank of Ireland UK Fidor Bank
Citibank (Citigroup) RCI Bank
Clydesdale Bank (National Australia) Triodos Bank
Firstsave (First Bank Nigeria)
Al Rayan Bank
ING Direct (Barclays)
State Bank of India UK
Yorkshire Bank (National Australia)

Anglo-Irish Bank was merged with Irish Nationwide Building Society to form Irish Bank Resolution Corp after both were nationalised at the height of the banking crisis in Ireland.

Most accounts were transferred from Anglo-Irish to Allied Irish Bank. The few that remained should have been refunded by the Irish government's Deposit Guarantee Scheme when IRBC was forced into liquidation in February 2013.

Will my bank or building society go bust?

Man with a red head Take a trip back a few years and this question would've been laughed out of school. Yet 2007 and 2008 saw such massive tremors – with Northern Rock, Bradford & Bingley, Icelandic banks and Wall Street giants Bear Stearns, Merrill Lynch and Goldman Sachs experiencing various degrees of catastrophe – that everyone started asking "Am I safe?"

For the moment, things appear to have calmed down, but you should take nothing for granted.

Bailouts more common than payout

It's right to focus on the Financial Services Compensation Scheme, but actually it's the last line of defence.

With most of the banks that collapsed during the financial crisis, politicians stepped in with alternative remedies. Both Northern Rock and parts of Bradford & Bingley were nationalised, and Kaupthing Edge's savings business was transferred to ING Direct.

That could be seen as a huge statement of intent that politicians will take extreme action to avoid a bank going to the wall. Of course, since then we've had a change of government, so we don't know how it'd work now – but it's likely similar things would be tried.

The only UK savings bank that went into liquidation was Icesave. Unlike fellow Icelandic bank Kaupthing, its structure meant it was technically an Icelandic bank, not a UK one. Even then, the Government covered every penny, not just the £35,000 compensation limit (as it was back then).

Even with this though, while the Government's intention seems to be for no one to lose any cash, regardless of the amount they save, that ISN'T guaranteed.

So it's important to think this way...

The UK Government's intention is to protect all savers, but only the first £85,000 is guaranteed. So that needs to be the focus.

How to assess a bank or building society's finances

Is the FSCS big enough to cope?

What if the FSCS didn't have enough money?

How to save in 100% safety

100% safe ways to save money There are a number of techniques for this, including some accounts that are 100% safe above and beyond the normal limits (see 100% safe savings below), but that can mean getting lower interest rates. So for most people, the golden rule is...

Spread your savings

Putting money into more than one account doesn't just mean more of your money is protected. It also follows the sensible old adage "don't have all your eggs in one basket", therefore mitigating risk.

The techniques you adopt depend on the amount of cash you want to save.

  • Under £85,000

    If you've less than £85,000, there's no problem in terms of protection. Yet if a bank went bust and you were to have to claim compensation this could take time (though the procedures have been sped up), and meanwhile you wouldn't have access to any cash. So it's still worth considering splitting money across more than one financial institution.

  • Over £85,000

    For those with bigger savings, in the unlikely event a bank or building society went bust, the golden rule is not to put more than £85,000 in any one financial institution. Spread your savings around a number of accounts.

    This a perfectly sensible strategy; just use the tool above to check they genuinely are separate institutions.

  • Very large amounts

    For those with very large amounts of savings (for example, from a house sale) there's now a temporary six-month £1 million limit. This only applies after a 'life event' has caused you to have temporarily high cash balances. Life events can be house sales, inheritances, compensation paid, insurance policies & several other events.

    If you do have a claim while you're protected by this temporary limit, you'll need to prove where the high balance came from for the claim to be approved. You would then have to wait up to three months for the FSCS protection to pay out.

    If you'll have permanently high cash balances after the life event, you may need to forget the £85,000 limit and just spread your cash into three or four different accounts. While you're not fully protected, the act of spreading is at least mitigating a chunk of the risk.

There are usually nine or 10 very competitive accounts, meaning you can save well over £85,000 in perfect safety. To help, at several top accounts are included in the Best Buy Savings Accounts guide, so pick the highest payer then work your way down.

Plus any new best buys go in the weekly email.

100% safe ways to save

It's also possible to get 100% safety via using a variety of different techniques.

  • National Savings and Investments (NS&I)

    All money in the state-owned bank NS&I is fully backed by the Government, meaning money put in there is as near to 100% safe as you can get.

    Technically it doesn't have any more protection than any other institution, as ultimately the protection most banks have is that if they go bust, the Government will bail them out. Here it's Government-owned, so as it'd take the Government going bust for it to be in trouble it's as safe as it gets (if the UK went bust we'd all have bigger problems!)

    Its most popular product is Premium Bonds, though the returns on them aren't great (see the Premium Bond Probability Calculator) and you can only put £50,000 in there anyway.

    It does have other products, including normal savings accounts, and cash ISAs, and at various times the rates are reasonable. Good ones will always be in Top Savings guide.

  • Repay your debts

    Most credit cards and loans cost a lot more in interest than you earn on your savings. So repay the debt with the savings and you're quids in. Once debts are gone, they're gone, so it's safe. See the Repay Debts with Savings guide.

  • Overpay on your mortgage

    Many mortgages let you pay off a bit a month, or even in big chunks. Paying off a mortgage, say at 6%, is a bit like earning that amount on savings after tax as DECREASING your costs is similar to EARNING cash.

    Plus, in a tough mortgage market, the less you borrow compared to the house's value, the better deals are available to you. So repaying now may lead to a better deal at remortgage time. Full info, including a special calculator, in the Should I Pay Off My Mortgage? guide.

  • Northern Rock is no longer 100% safe

    From 2007, when it was taken over by the Government, until May 2010, all savings in Northern Rock were 100% safe, as like NS&I, it was a state-owned bank.

    Between May 2010 and 31 December 2011, it had the same protection as any other UK bank (£85,000) with the one exception of any fixed-rate savings set up before 24 February 2010, which retain their fully Government-backed status until they mature.

    On 1 January 2012, Virgin Money completed the purchase of the savings arm of Northern Rock. Virgin has now rebranded all Northern Rock accounts, so they now fall under the same lot of £85,000 FSCS protection.

  • Your money's not safer under your mattress

    If you don't trust banks, you may want to stash cash under the mattress. But most home insurance policies only cover up to £750 cash if it's nicked. Plus – as a fireman told us – "Money under the mattress make a nice accelerant in house fires for us to deal with."

    So, all in all, it's probably better to find a decent savings account for your cash.

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