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What UK bank accounts are protected by the FSCS?

Last Edit: 20/05/18

The Financial Services Compensation Scheme (FSCS) can protect the following: Bank savings accounts; Bank current accounts; Building society savings accounts; Building society current accounts; Cash ISA; Business accounts (for smaller companies); and Credit unions.

FSCS: Financial Services Compensation Scheme Logo

FSCS (Financial Services Compensation Scheme) Logo

The Financial Services Compensation Scheme (FSCS) only applies to bank accounts that are run by financial institutions regulated by the Financial Services Authority: the FSCS website currently states that "96% of UK savings and current accounts are FSCS Protected for free." You can find out whether your bank account is protected by searching the FCA's Financial Services Register (https://register.fca.org.uk/) . As you would expect, all UK high street banks are protected by the FSCS: HSBC, Barclays, Natwest, Bank of Scotland (RBS), Halifax, Lloyds TSB, Nationwide, and Santander. There are plenty of foreign owned banks -- such as Santander -- that are UK regulated and fully covered by the FSCS; however, some are not, such as Renault Crédit International (RCI), which is protected by France's compensation scheme (currently €100,000).

At present (2018) £1-£85,000 per person is protected by the FSCS at each financial institution (per banking license); the previous limit was £75,000, but it was increased from the 30th January 2017, due to the uncertainty of the Brexit vote. For joint accounts, a total of £170,000 is protected, because the FSCS protects £85,000 per person. Savers can protect more than £85,000 by placing funds in bank accounts ran by different financial institutions (per banking license). Therefore its important to ensure you are not placing funds with companies who operate under the same banking license: as only £85,000 will be protected. The Royal Bank of Scotland Group plc has many banking subsidiaries -- Halifax, NatWest, Bank of Scotland, Ulster Bank and BM Savings -- and it is the most obvious example where over £85,000 could be placed in different banks but only £85,000 is protected. It is also suggested that you only place a maximum of £83,000 in each account: so that any interest received is also protected. Previous estimates (2013) have suggested you can protect £750,000 before you will run into problems of placing money in low yielding accounts -- this figure will be subject to change.

The Financial Services Compensation Scheme (FSCS) also offers protection for 'temporary funds' of up to £1 million; 'temporary funds' refers to 'life events' like the proceeds of a house sale, or an inheritance, which would only reside in a bank account for a short space of time. The process of proving your savings are 'temporary funds' will be more 'involved' (documentary evidence etc) and the time it will take to receive the compensation will be months rather than weeks (which is the projected compensation timeframe for the standard £85,000 protection). Some other payments that could be classed as a temporary high balance are: benefits from a insurance policy; personal injury compensation; benefits from a disability; wrongful conviction compensation; unfair dismissal compensation; redundancy payment; divorce of a marriage or civil partnership; retirement and death benefit; and inheritance.

Products offered by the National Savings & Investments (NS&I) do enjoy security but are not covered by the Financial Services Compensation Scheme (FSCS).