UK cuts bank depositor protection to £75k from £85k

1dave123

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" The Prudential Regulation Authority (PRA) is today announcing changes to depositor and policyholder protection provided by the Financial Services Compensation Scheme (FSCS).

For the majority of depositors currently covered by the FSCS, the existing level of deposit protection (£85,000) will be maintained for six months before changing to £75,000 after 31 December 2015."

Link to press release
[broken link removed]
 
Thanks. Best buys updated.

I assume that Nationwide UK (Ireland) and Leeds Building Society (Ireland) will have to write to their customers to inform them of the change.

At current FX rates, slightly over 100,000 EUR will be protected.

Also, an interesting new rule has been added ...

From today, 3 July 2015, depositors with temporary high balances will be covered up to £1 million for six months from the date on which the money is transferred into their account, or the date on which the depositor becomes entitled to the amount, whichever is later. This is to ensure that depositors are protected when they deposit funds over the limit as a result of specified events, including following a house sale or funds received from a ‘life event’ such as a divorce settlement or inheritance, for a period of time until they have had sufficient time to spread the risk between institutions to appropriately protect these funds.

For insurance policyholders, the PRA has changed the insurance limits for FSCS compensation to increase protection for policyholders in the event of an insurer failing. This increases the limit to 100% of cover for all long term policies, for professional indemnity insurance and claims arising from death or incapacity. This reflects the potential for significant adverse consequences to policyholders, and the wider financial system, of cover being disrupted. The limits for all other types of insurance remain the same.
 
That new rule is a nice addition. It'd be horrible to sell a house or get an inheritance and then have the bank go tits up a short time later and lose all or most of it. It'll probably never be needed but still nice to have.
 
Does this mean that if you have > 100,000 that you should move it from Nationwide UK to Leeds every 6 months and you'd be covered?
 
No, you would need to be able to prove that the source of the funds was a 'life event' inside the prior 6 months.
 
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