As a result of the financial crisis of 2008, most people are aware that the failure of a bank or building society, results in compensation payable by the Financial Services Compensation Scheme (FSCS), limited to £85,000 per individual per institution. More recently, certain temporary high balances received extra protection, with no maximum, including personal injury and fatal accident awards, but limited to a six month period. As a result of Covid 19, protection for those awards has been extended further;
Caroline Rainbird, FSCS Chief Executive, said, “The coronavirus pandemic has been very worrying for everyone, and people are understandably concerned about the possibility of losing their temporary high balance should their deposit taker fail. The temporary extension of FSCS’s protection from six to 12 months will do much to reassure them should the worst happen during these uncertain times.”
The extra protection commences for awards received from 6th August this year, and continues until 1st February 2021.
Whilst the extension is welcome, it remains temporary, and greater protection is available on a more permanent basis, possibly with superior interest rates than available from banks, particularly for trust and deputy accounts. We can assist with this, through our specialist knowledge of managing and investing personal injury and fatal accidents awards.
Further information can be found at https://www.fscs.org.uk/media/press/2020/aug/thb-coverage-extended/ for information on the FSCS temporary high balance extension and https://www.fscs.org.uk/how-we-work/temporary-high-balances/ for details on unlimited protection for PI and FA awards.