Post Office savers will have their deposits protected under the UK’s Financial Services Compensation Scheme (FSCS) from today, it has been confirmed.
Previously Post Office savings accounts were operated by Bank of Ireland in the Republic of Ireland, meaning that savers’ money was guaranteed by the Irish compensation scheme. This covers the first 100,000 Euros held in an individual’s account.
Had the Post Office experienced financial difficulties up until now, customers would have had to rely on the Irish government to protect their cash. This alarmed some savers as there have been fears over the stability of the Irish economy.
However, as of 1 November Post Office savings and the deposits of Northern Irish customers will be housed within a new UK subsidiary of Bank of Ireland. This puts people’s money under the protection of the UK compensation scheme, which guarantees £50,000 per individual, per financial institution. (You can read more about the FSCS in our Are my savings safe? advice guide.)
If the change affects you, you should have received a letter from Bank of Ireland explaining the decision to protect your money in the UK.
New Best Rate savings accounts
Because we know many people prefer to have their savings protected under the UK’s compensation scheme, it is a requirement that accounts Which? lists as Best Rate deals are covered under the FSCS.
Today’s change will therefore have an effect on our latest Best Rate savings tables, as we’ll be able to include Post Office accounts that were previously disqualified. Among them is the Post Office Online Saver instant access account, which pays a table-topping 2.90% AER.
Which? savings accounts expert Jo Langenhan says: ‘The move to protect Post Office savers’ money under the UK compensation scheme makes sense, and is great news for people who have cash in its accounts.
‘The fact that Post Office savings weren’t guaranteed under the FSCS for so long caused confusion and concern among consumers, so it’s good to see that those worries have been taken seriously.
‘Even better, the Post Office has several competitive savings accounts available at the moment – and now Which? can confidently include them in our Best Rate tables. Visit our reviews of instant access savings accounts and fixed-rate bonds to get information on the latest deals.’
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