The Prudential Regulation Authority (PRA) has proposed increasing the deposit protection limit of the Financial Services Compensation Scheme (FSCS) from £85,000 to £110,000 due to inflation and the aim of boosting consumer confidence. If approved, the new limit would take effect from December 1, 2025, and would apply to UK-authorized banks, building societies, and credit unions. Officials, including Sam Woods and Martyn Beauchamp, emphasize that this measure is crucial for maintaining trust in the financial system, which is vital for economic stability and growth.
"Confidence in our financial system is an essential foundation for economic growth. We want to support confidence in our banks, building societies and credit unions by raising the amount that people can keep in their account which is covered by the deposit guarantee scheme to £110,000 per person, so all that money is safe even if the firm fails."
"Depositor protection is what FSCS is best known for, as it covers the money held in our day-to-day current accounts and savings. Consumers tell us that the existence of FSCS protection is a key driver of their trust in financial services, and this trust is in turn a critical component of stability and growth.
"A higher FSCS limit is great news for savers and for confidence in our banking system. For those holding significant cash savings it will provide more shelter. Uprating the limit in line with inflation is very welcome. The Government need to be careful about mixed messages as there are rumours that Cash ISAs will be made less attractive to try and promote investment and so there is room for confusion if cash is being rewarded and punished at the same time."
Collection
[
|
...
]