For most people, £85,000 worth of savings cover will provide adequate protection. But what if you have more than this amount in savings?
The answer is that it's vital to spread your money around, placing it with separate financial institutions so that each chunk of your cash is covered separately under the Financial Services Compensation Scheme (FSCS).
If you place too much money with a single institution, you could stand to lose some of it if your bank or building society went bust. Unfortunately, it isn't always easy to spot which banks and building societies form part of the same financial institution.
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Who owns who in the savings market?
Our tool gives a comprehensive list of banking brands. Just search for the bank or building society you're looking for, and we'll tell you who they own, or are owned by, and how much protection you'll get under that brand.
Armed with this information, you'll be able to spread your money around different companies to ensure that you're fully protected should the worst happen.
If you see that two or more banking brands share the same banking licence, this means you cannot safely save more than £85,000 across all of them.
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. Below, we provide an update on some of the most recent and largest mergers.
Lloyds and TSB
In 2013, hundreds of Lloyds TSB branches were rebranded and millions of customers were moved to a standalone TSB. Lloyds was forced to offload TSB after being bailed out at the height of the financial crisis.
Spanish bank Sabadell agreed to buy TSB in 2015, aiming to turn the bank into a major competitor to the big five lenders in the UK.
Lloyds and HBOS
Lloyds (then Lloyds TSB) and HBOS (formed by the 2001 merger of Halifax and the Bank of Scotland) retained their separate FCA registrations after their merger in 2009.
Customers with a Lloyds savings account and an HBOS savings account have £85,000 protection with each.
However, each of these banks own several different brands under the same licence, so you should use out tool above to ensure your funds are completely safe.
Santander, Alliance & Leicester and Bradford & Bingley
The takeover of Alliance & Leicester by Spanish bank Santander resulted in A&L and Santander being part of the same group. As of 28 May 2010, all Alliance & Leicester business transferred to Santander.
Alliance & Leicester 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 in 2008, 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.
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 £85,000 held by savers across the three societies will be guaranteed.
Post Office accounts
On 1 November 2010 Post Office savings accounts were transferred from the Bank of Ireland to a new UK subsidiary. Bank of Ireland UK, as it is now known, is authorised and regulated by the FCA.
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 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 £85,000.
The Co-operative and Britannia
Since The Co-operative and Britannia merger in 2009 only the first £85,000 held across both the Co-Op and Britannia is covered.
The Skipton and Scarborough building societies
The same applies to savers with Skipton and Scarborough building societies – only the first £85,000 across both building societies is protected after they merged in 2008.
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.
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 (around £85,000).
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.
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 call the FCA Consumer Helpline on 0800 111 6768 or 0300 500 8082.