Bank of England considers returning the FSCS compensation limit to £85,000

by Insignis in Newsletter Archive

The Bank of England has announced that consultation over the FSCS compensation limit will take place with a view to returning to its previous limit of £85,000. The compensation limit is set across the European Union at €100,000 and was changed to £75,000 in January 2016 reflecting the prevailing exchange rate at the time. Re-calculations would ordinarily take place every 5 years but since the Brexit vote sterling has fallen 10% against the euro, prompting the Bank of England to consider the directive that allows a “reassessment where there are unforeseen events such as currency fluctuations.” The Prudential Regulation Authority (PRA), which is part of the Bank of England, will consult on the plan until 16th December, however approval has already been given by the Treasury and the European Commission. Once agreed the change is expected to be introduced on 30th January 2017.

So, what is the FSCS scheme and why was it put in place?

Deposit guarantee schemes exist to protect depositors against authorised firms that are unable to pay or become insolvent. The European Commission requires all countries to provide a last resort protection to consumers in the event of a bank failure. Rules exist in the form of an EU directive for offering a limited level of protection, faster pay-out and improved internal financing of the schemes by each bank. This provides protection on both an individual front and a wider economic level.

Do you have more questions about the FSCS deposit guarantee and how it affects savers?

Insignis Cash Solutions specialises in active management of client deposits including helping clients gain incremental FSCS protection by opening multiple accounts across various financial institutions with a simple one-signature solution.

Leave a Reply

Press Contacts

TWITTER

Insignis Cash's Twitter avatar
Insignis Cash
@InsignisCash

As expected #TheBankofEngland , raises the base rate again, by a further 0.75% to 3.00%. This follows this week's E… t.co/Wk8JdfEMYn

Insignis Cash's Twitter avatar
Insignis Cash
@InsignisCash

We’re happy to announce that @CynergyBank has joined our platform. We now have 37 #Banks and over 2,000 #savings p… t.co/7YgPMTLJgE

Insignis Cash's Twitter avatar
Insignis Cash
@InsignisCash

Did you know we've been featured in the @EveningStandard? Read their latest Business Guide to understand how using… t.co/CBbfZHYwId

Tech Nation's Twitter avatar
Tech Nation
@TechNation

@helpful_world offers an end-to-end financial solution for new economy businesses to manage funds, customer payment… t.co/e41hPuAOtJ

Retweeted by Insignis Cash
Insignis Cash's Twitter avatar
Insignis Cash
@InsignisCash

We are excited to have been chosen to be part of @TechNation Fintech 5.0, an exclusive network of high-growth UK… t.co/SpoqPYwLXd

As Featured In: