The deposit compensation limit increased from 50,000 to 85,000 for each person, per authorised firm, from 31 December 2010. This will offer consumers greater protection and bring the savings guarantee in the UK into line with much of Europe. If a UK financial services firm is unable, or likely to be unable, to pay money you have deposited with it, the Financial Services Compensation Scheme (FSCS) may be able to pay compensation.

The FSCS will now be able to provide compensation for deposits of up to 85,000 to each person, per authorised firm. If you have a joint account you will each be able to claim up to 85,000, up to a total of 170,000. The new limit brings the UK into line with the €100,000 deposit compensation limit which is now in force in the European Economic Area (which includes the EU states, plus Iceland, Norway and Liechtenstein).

Owing money to a firm in default

Another change is that compensation will now be paid regardless of any money you owe to a firm declared in default. An exception to this is if your savings or current account is combined with your mortgageicon account, and operates as a single overdraft. The depositor will still be responsible for the debt, such as a loan, mortgageicon or credit card debt.

Faster payments

The FSCS will also make faster payments to eligible individuals, aiming to pay most people within seven days and the remainder within the required 20 days.