Savers will be given more protection in the event that their bank collapses, as the Financial Services Compensation Scheme (FSCS) aligns itself with the Euro pay-out.
The FSCS is to up the limit it will pay out to deposit account holders whose banks go bust to the equivalent of €100,000 on 31 December.
The current limit of £50,000 will be increased in accordance with European legislation. It will mean that UK savings account holders will receive the same level of compensation as savers who bank with providers on the continent.
The increase will benefit all consumers who bank with a UK bank, providing they do not save with multiple brands that are members of the same banking group.
For instance, Derbyshire, Cheshire and Dunfirmline building societies have merged with Nationwide, so the maximum limit would be spread across all accounts.
This means that if you had £40,000 in a Cheshire Building Society account and £40,000 with Nationwide, and the parent bank collapsed, you would currently get only £50,000 back, rather than £80,000.
For more on the FSCS, see the Which? Protecting your savings advice guide.
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