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    • MSE Guy
    • By MSE Guy 22nd Sep 10, 12:17 PM
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    MSE Guy
    MSE News: Boost to savings protection revealed by FSCS
    • #1
    • 22nd Sep 10, 12:17 PM
    MSE News: Boost to savings protection revealed by FSCS 22nd Sep 10 at 12:17 PM
    This is the discussion thread for the following MSE News Story:

    "The existing 50,000 per person, per financial institution guarantee will rise to 100,000 on 31 December ..."

Page 1
    • Aidy
    • By Aidy 22nd Sep 10, 3:14 PM
    • 2,230 Posts
    • 3,211 Thanks
    Aidy
    • #2
    • 22nd Sep 10, 3:14 PM
    • #2
    • 22nd Sep 10, 3:14 PM
    It's not all good news though; those currently affected by mergers (bail outs) of smaller building societies by organsiations such as Nationwide, Coventry, Yorkshire BS etc (I think) currently have 50000 cover per old organisation. This stops on 30 December when these new rules come in, so I believe you only get one overall amount of cover of 100,000 euros:

    More about Bank and Building Society Compensation Limits

    The maximum level of compensation for bank and building society claims is the higher of 50,000 or 50,000* per person per firm (for claims against firms declared in default from 30 June 2009).
    The FSA introduced a temporary rule on 27 November 2008 relating to the merger of building societies, which is effective from 1 December 2008. A merged building society will be able to keep separate compensation limits for customers who already had accounts with both building societies before a merger. As a result, those customers do not lose any protection and retain the FSCS limit of 50,000 for accounts with each predecessor business. Depositors who join the merged building society will only be entitled to the usual FSCS coverage for deposits of 50,000, regardless of whether they open accounts with each of the two merged businesses. The new rule will operate until 30 December 2010.

    Further information can be found on the FSA's website.
    This rule change affects mergers between building societies only, not mergers between two banks, or between a bank and a building society. This is because the laws that affect building societies and banks are different. If two banks merge they have the ability, should they wish, to retain separate authorisations and separate coverage under the FSCS. This is not the case for building societies.

    http://www.fscs.org.uk/what-we-cover/eligibility-rules/compensation-limits/deposit-limits/
    • Mr K
    • By Mr K 24th Sep 10, 7:17 AM
    • 1,122 Posts
    • 667 Thanks
    Mr K
    • #3
    • 24th Sep 10, 7:17 AM
    • #3
    • 24th Sep 10, 7:17 AM
    Presumably the protection for a joint account will be 200,000 Euro (170K). Sometimes it's not bad to be part of the EU, couldn't of seen our Govt. increasing limits at the moment.

    As for the merged building societies losing 'double protection'. Maybe those who voted for these mergers are now realising their mistake by voting as they were told. Apart from loss of protection the market has become less competitive. YBS promised market leading rates as rates as result of the Chelsea merger. Still waiting....... The directors however will have done very well out of it.
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