13th July 2016 Posted by - Financial Adviser in Derby
With all the talk of the Brexit it’s hardly surprising that many people are questioning whether or not their savings are safe, so here’s our quick guide on the lowdown of savings protection.
Although the savings safety guarantee referred to in the article is an EU rule, the EU only dictates the amount of money protected.
- All UK Regulated accounts including current accounts, savings accounts and cash ISA’s in banks as well as building societies and credit unions usually get £75,000 protection as they are covered by the Financial Services Compensation Scheme (FSCS). Although there is £75,000 protection on these types of account, it doesn’t necessarily mean that you’ll get the £75,000 per account, as the protection only covers each institution. What this means is, if your bank accounts are all owned by the same institution, you’ll only get a maximum of £75,000 compensation in the event of a fail irrespective of the amount of savings you hold with the institution.
- It is worth noting that not all UK savings are UK regulated. Although most banks, including foreign-owned Santander for example, are UK regulated a few EU-owned banks opt for a ‘passport scheme’ where you will have to rely on the protection from their own government.
- If you hold a joint account, the account holdings are protected as though you are two people rather than one bank account therefore giving you protection of up to £150,000 under that particular institution. If you both hold separate accounts it’s important to remember that you will only ever be covered for up to £75,000 each, per institution.
- Spreading your savings over as many individual institutions as possible is the best advice. It’s important not to forget to leave room for interest to be added, or when savings move over the £75,000 mark, look at moving the surplus over the £75,000 mark to another bank account with another institution.
Don’t forget that an institution is not the same as a bank! Take the time to research which banks and building societies are part of the same groups and then ensure you’re spreading your savings over different banking groups not different banks. Don’t forget also that should a bank fail, having savings spread out over other banks should ensure that you can get your hands on your savings at any given time.
If you’d like to talk about savings and where you can invest your money we’d only be too happy to help. You can call us on 01332 223888 or fill in the form below and we will get back to you as soon as we possibly can.