FSCS compensation pot set at £337M for 2016/17

The financial services industry funds the compensation through a levy to FSCS and in 2016/17 the levy will be £337m.

FSCS has helped 4.5m people get back £26bn since it was created in 2001. In 2015/16 alone, 26,736 claims were upheld to the tune of £272m.

The service is free, giving consumers peace of mind their money is safe.

FSCS protects current and savings accounts to £75,000. If you sell your house, or have another reason for an unusually-high balance in your bank account temporarily, this may also be protected, up to £1m, in most cases, for six months.

Investments and mortgage advice are covered for the first £50,000, while protection for customers of the insurance sector may be protected to 90 or 100 per cent of the claim, with no upper limit.

Last month, nearly 1,000 people in the West Midlands were helped by FSCS, which stepped in when Whitmore Reans Credit Union stopped trading. After confirming Whitmore Reans would be unable to repay deposits, FSCS paid out more than £1.1m to the credit union’s customers within a few days.

Mark Neale, FSCS chief executive, said: “Customers of many different financial products know their money is safe should the worst happen. It’s good news for them, and it’s encourages stability in the financial sector.

“We fund the compensation we pay through a levy on banks, building societies and other firms that offer financial services. We come to the aid of people with nowhere else to turn. That promotes consumer confidence and trust in the industry.”

www.fscs.org.uk