Money Infant

In the last few years, the economy has become increasingly unstable and the newspapers have been filled with reports of banks and other financial organizations failing. This has understandably left consumers who save their money with banks and building societies feeling a little nervous.

Is the government doing anything to protect my money?

The answer to this question is yes, the government has a scheme in place called the Financial Services Compensation Scheme (FSCS). This is designed to protect consumers and their money in the event that a bank or building society should collapse.

What happens to my money if my savings account provider collapses?

If you save your money in a savings account or ISA with a particular provider, and that provider goes under, you will be refunded by the FSCS. This compensation covers everything from savings and current accounts to ISAs.

Are there any exceptions or limitations to the FSCS?

There is a limit to compensation you can receive as part of the FSCS, and this is £85,000 per person. However, it extends to £170,000 if you save money with a partner in a joint account.

The scheme does not, however, cover:

• Banks and financial institutions that are not registered with the Financial Services Authority (FSA)
• Investments and shares, although you would get compensation if the provider of your investment were to collapse