FSCS - protecting your money Mergers - are my savings still safe?
When two financial providers merge, this can have a significant impact on the protection your savings have if they also merge their FCA authorisation.
Each individually licensed financial institution in the UK offers £75,000 of protection to every saver in the event that the company were to go bust. But many banks and building societies are owned by the same group and share a license.
For this reason, it's important to ensure you keep up to date with who owns who in the savings market.
Below, we provide an update on some of the most recent and largest mergers.
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It is important to understand the rules around savings safety and be sure that your money has the maximum protection possible. It's also vital that you earning the best interest on your savings.
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Santander, Alliance & Leicester and Bradford & Bingley
The takeover of Alliance & Leicester by Spanish bank Santander has resulted in A&L and Santander being part of the same group. As of 28 May 2010, all Alliance & Leicester business has been transferred to Santander.
Alliance & Leicester has lost its separate banking licence and FSCS protection, effectively halving the FSCS cover for those who had accounts with both brands.
When Bradford & Bingley was nationalised, savers with Bradford & Bingley accounts had their money transferred to Abbey - owned by Santander- as part of the deal. All Bradford & Bingley deposits now come under the Santander registration.
Nationwide BS, Cheshire BS, Derbyshire BS and Dunfermline BS
Since December 2008, Nationwide Building Society has taken over the Cheshire, Derbyshire and Dunfermline building societies.
It's important to be aware you will get just one set of FSCS protection across all of the brands.
Lloyds TSB and HBOS
Lloyds TSB and HBOS have retained their separate FCA registrations after their merger, so customers with a Lloyds savings account and an HBOS savings account have up to £150,000 of protection.
However, each of these banks own several different brands, so you should check whether you have savings with any of the other banks they own to ensure your funds are completely safe.
The Yorkshire BS, Barnsley BS, Chelsea BS and Norwich & Peterborough BS
The Barnsley Building Society merged with the Yorkshire Building Society in December 2008, and it was announced in December 2009 that the Chelsea Building Society would become part of the same institution by 1 April 2010.
On 1 November 2011, the Norwich & Peterborough Building Society was added to the Yorkshire Building Society group. As with Nationwide, only the first £75,000 held by savers across the three societies will be guaranteed.
The Skipton and Scarborough building societies
The same applies to savers with Skipton and Scarborough building societies, only the first £75,000 across both building societies is protected.
The Co-operative and Britannia
Since The Co-operative and Britannia merger only the first £75,000 held across both the Co-Op and Britannia will be covered.
For more information on how your bank is authorised and how your savings are protected, visit the Financial Conduct Authority website (www.fca.org.uk) or you can call the FCA Consumer Helpline on 0800 111 6768.
Post Office accounts
As of 1 November 2010 Post Office savings accounts have been transferred from the Bank of Ireland to a new UK subsidisary. Bank of Ireland UK, as it will be known, will be authorised and regulated by the FSA. If you have a Post Office account this change affects the way your savings are protected.
Before the transfer took place, any savings you had with the Post Office were covered by the Irish Deposit Scheme, of which the Bank of Ireland who provided the Post Office accounts was a member. Your savings were protected up to €100,000 (approximately £75,000) and further deposits were covered by a top-up guarantee scheme operated by the Irish Government.
Since the transfer, your savings are now covered under the FSCS up to £75,000. In addition the following further protection applies:
- to fixed term accounts which were opened between 11 January 2010 and 31 December 2010 with a term of up to five years
- to fixed term deposit that was opened before 11 January 2010 that has since been rolled over into a new fixed term deposit after 11 January 2010 for a term of up to five years
- This applies to the Growth Bond, Loyalty Bond and Fixed Rate Cash Isa.
National Savings and Investments
National Savings and Investments (NS&I) is backed by the Treasury, and therefore not covered by the FSCS. This affords account holders greater protection than that available to FSA authorised banks. In fact, 100% of all NS&I savings are fully protected.
Overseas banks and savings safety
Banks established within the EEA will be covered under their home country’s compensation scheme, giving a level of cover of 100,000 Euros (around £75,000).
If you have savings in an Irish bank you should bear in mind that you are covered by the Irish scheme, not the FSCS. If you want to be covered by the UK compensation scheme, consider switching your savings into an authorised UK provider's savings account.
The UK does not include the Channel Islands, Gibraltar or the Isle of Man. These are Crown dependencies and compensation is governed by their own laws.
Which? Limited (registered in England and Wales number 00677665) is an Introducer Appointed Representative of Which? Financial Services Limited (registered in England and Wales number 07239342). Which? Financial Services Limited is authorised and regulated by the Financial Conduct Authority (FRN 527029). Which? Mortgage Advisers and Which? Money Compare are trading names of Which? Financial Services Limited. Registered office: 2 Marylebone Road, London NW1 4DF.