FSCS Temporary High Balance Protection

cloud_dog

https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/

I understand the concept for the temporary high balance protection for 6 months, but I am wondering if it is invalidated if you take action on the funds?  By this I mean if you receive £200k in a property sale (for example), then move it to Shawbrook 6 Month 2% Fixed Rate, would that still retain the temporary increased protection of would the fact that you have chosen to move more than the FSCS limit to a single provider remove the temporary protection?  

EDIT: I see it was extended to 12 months.

OldMoneySaver

It was extended temporarily to 12 months but is now back at 6.

There seemed to be inconsistent info from FSCS in an old thread but ultimately it appeared that it was OK to move it:

https://forums.moneysavingexpert.com/discussion/5910251/temporary-high-balance-cover-across-different-banks/p1

cloud_dog

OldMoneySaver said:

It was extended temporarily to 12 months but is now back at 6.

There seemed to be inconsistent info from FSCS in an old thread but ultimately it appeared that it was OK to move it:

https://forums.moneysavingexpert.com/discussion/5910251/temporary-high-balance-cover-across-different-banks/p1

Having read that thread, I think it is probably fair to assume that moving the money to another account does not retain the temporary high balance protection

And, as one of the posters provides, FSCS really cannot confirm one way or another until a claim is made and the situation is analysed. 

Bigwheels1111

Best to split the money up inti several accounts.
That’s what I did.

masonic

cloud_dog said:

OldMoneySaver said:

It was extended temporarily to 12 months but is now back at 6.

There seemed to be inconsistent info from FSCS in an old thread but ultimately it appeared that it was OK to move it:

https://forums.moneysavingexpert.com/discussion/5910251/temporary-high-balance-cover-across-different-banks/p1

Having read that thread, I think it is probably fair to assume that moving the money to another account does not retain the temporary high balance protection

And, as one of the posters provides, FSCS really cannot confirm one way or another until a claim is made and the situation is analysed. 

I think that view stems from some incorrect information provided by FSCS customer services, but I can understand why someone may wish to err on the side of caution.

gwapenut

I'll just update this old thread with my own experience.

I have today clarified in writing with the FSCS that the money remains protected even when it moves out of the original recipient account, whether internally or externally.

Of course, it still does not feel entirely risk free to leave so much money in one institution, but it has been confirmed to be theoretically safe. Anyone planning to make use of this should get their own confirmation from the FSCS as there is nothing in the FAQ about redirecting funds - you could argue that the original receipt is outside your control, but that how you then safeguard it with subsequent transfers is well within your own control.

"The protection for a temporary high balance can stay with the money as it moves accounts or banks so long as the new provider is also FSCS protected. If the firm the money is with should fail we would need to see some documents to show where the money came from and then where the money transferred to."