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The Financial Services Compensation Scheme (FSCS): A Quick Overview
The FSCS was established in 2001 to protect consumers in the event that their bank, building society, or other financial institution fails. It also extends protection to mortgages, investments, and insurance products.
A May 2023 survey of 2,000 people by the FSCS highlighted that awareness of the scheme boosts consumer confidence in financial services for 63% of respondents. Additionally, 55% agreed that the FSCS contributes to overall financial stability. More than half (63%) said they are more likely to save, invest, or spend when they know a provider is FSCS-protected, and 59% said they are more likely to recommend FSCS-backed products.
Here’s a breakdown of how the FSCS protects your money:
What is the FSCS?
Introduced under the Financial Services and Markets Act 2000, the FSCS compensates customers if their financial institution collapses. This means that if your bank, building society, or credit union goes under, the FSCS will step in to compensate eligible customers.
Multiple accounts with the same bank or building society
If you hold multiple accounts with one provider, the FSCS provides cover up to £85,000 total, even if your combined savings exceed that amount. Many banks operate multiple brands under a single licence, and the £85,000 limit applies to the licence, not the individual brands.
Multiple accounts with different providers
If you hold accounts with different institutions, the level of protection depends on whether these providers share a banking licence. If they are separate entities, you receive £85,000 protection for each institution. However, if different brands are registered under the same licence, the £85,000 limit applies across all accounts under that licence.
Joint accounts
For joint accounts, the FSCS provides up to £170,000 in protection—£85,000 per person. However, this limit applies per institution, so if the joint account holds £170,000 at one bank, and you both have individual accounts totaling £20,000 at the same bank, the total cover remains £85,000 per person.
NS&I savings
If you have savings with National Savings & Investments (NS&I), they are fully backed by the government, meaning your savings are protected in full, even if they exceed the £85,000 FSCS limit. For instance, if you have £100,000 in an NS&I account, the entire amount is covered.
