FSCS protection for your savings

The Financial Services Compensation Scheme (FSCS) protects your savings when financial firms fail.

It’s a free service that anyone in the UK can access if an authorised financial organisation goes out of business and you are at risk of losing your money.

There is a limit to how much savings protection you could receive. We’ll explore the FSCS, its compensation limits, and how it protects your savings below.

If a financial services firm goes out of business and cannot return your money, you can claim for lost savings up to £85,000 with the Financial Services Compensation Scheme. In most cases, the FSCS aims to return your protected savings up to the compensation limit within seven working days.

It’s a free, independent service in the UK funded by the financial services industry. The scheme only applies to funds saved within an authorised financial institution.

A bank or financial services firm must have a banking to operate. However, a banking firm or financial institution can have more than one brand, allowing many banks to share a banking licence.

The Financial Services Compensation Scheme covers up to £85,000 per person, per banking licence. The scheme does not cover each bank account. As a result, if your money is divided over multiple bank accounts across  organisations that share the same banking licence you will only be protected up to a total of £85,000.

To find out which banks share a licence and if your bank trades under any other names, visit the Financial Conduct Authority’s Financial Services Register.

It’s also worth noting that some banks that provide savings accounts are not regulated in the UK. With these banks, your money would not be protected under the scheme.

At Shawbrook, your eligible savings are covered by the Financial Services Compensation Scheme up to £85,000.

For more information, visit the Financial Services Compensation Scheme website.

FSCS protection applies to savings with an authorised UK bank, building society, or credit union in the event that the organisation goes out of business. If you’re eligible, deposits are covered up to the compensation threshold of £85,000 per person, per banking licence.

It’s a good idea to check that your funds are protected. As we mentioned above, some banks are owned by larger financial institutions and may share the same banking licence. So, if you have £50,000 saved with one bank and £50,000 with another — but the same financial group owns both banks — your funds would only be protected up to a total of £85,000. This example scenario would leave £15,000 unprotected.

Typically, when a bank goes out of business, depositors are automatically paid by the Financial Services Compensation Scheme. You can also make a claim for lost savings by contacting the FSCS.

You may be eligible for protection of temporary high balances. This would include money from a property sale, redundancy payments, and inheritance. In these circumstances, you could be covered up to £1,000,000.

The scheme also covers other financial services. For example, if your insurance company goes out of business, the FSCS may pay for protected claims. Or, if your pension provider has to close their business, you may be protected (so long as the Financial Conduct Authority regulates the pension).

In some cases, your money would not be covered by the FSCS. For example, the scheme does not cover claims against companies still in business. You would also not be covered if the organisation is not authorised by the Financial Conduct Authority or the Prudential Regulation Authority.

At Shawbrook, eligible deposits are protected by the FSCS up to £85,000. Shawbrook Bank is authorised by the Prudential Regulation Authority, and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register number: 204574).

Before you open a savings account, it's important to check whether the bank is covered by the FSCS, so that your deposits are protected up to £85,000.

Remember, your deposits with an eligible firm are covered up to the compensation limit. If you have savings over the threshold, you should consider opening other savings accounts with a different bank or building society, providing they have individual banking licences. Some savers may consider splitting significant funds across multiple banks, so money over £85,000 is protected.