FSCS - Temporary high balance

SpanishBlue

I know that normally £85,000 is the maximum amount covered by the FSCS, and this figure rises to £1,000,000 for life events like selling a house.

Can the funds of a house sale be moved from the account they originally arrive in to another account(s) taking the balance over £85,000, and still be safe under FSCS for 6 months, or must the funds remain in the account they originally arrived in?

taylornj

Look at NS&I accounts they cover a lot more than the FSCS limit.

SpanishBlue

I've spoken to FSCS today. They have confirmed that as long as you keep to the criteria specified on their website, you can move your money from your house sale to different banks/building societies as often as you like (to get the best interest rates eg), and you will still be covered by their compensation scheme for up to a million pounds for 6 months.

eskbanker

If you're planning on reusing the money for a subsequent property purchase (and needing it in specific timescales), it's worth noting the final Q&A at https://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-temporary-high-balances/:

Usually compensation for deposits is paid within seven days. Within what timeframe will I receive my compensation payment for a temporary high balance?
Within three months from the firm’s date of default, provided FSCS is in receipt of all the supporting evidence.

:eek:

Spreading the eggs across multiple baskets suddenly makes more sense!

bowlhead99

Thanks for coming back OP, to follow up with your findings.

A key point as noted by eskbanker is that if you need to make a claim, the onus is on you to prove - with suitable evidence - that the money you lost which you are claiming should be covered, did really qualify to be covered by either the standard rules or the temporary high balances exception.

So anyone hoping to rely on it needs to be happy they understand the rules and guidance themselves, and not reliant on posters on the internet; and just like with insurance companies, if someone at FSCS told you something was allowed that seemed ambiguous in the rules, make sure you have noted who you spoke to and when. Ideally, record the call for when they inevitably deny later that it works how they told you, saying it's just a misunderstanding on your part.

SpanishBlue

Thanks eskbanker and bowlhead99 for those very valid points.

I did email FSCS so that I had confirmation of what I was told in my earlier phone call, and I received the following reply....

As long as the property is your main residence you are protected under the temporary high balance for up to £1 million for up to six months from the initial deposit.

You are free to move the money to a different UK authorised account, however, the six months will not renew.