Did You Know..? FSCS Cover of up to £1 Million Available for ‘Temporary High Balances’

The majority of us are aware of the Financial Services Compensation Scheme (FSCS), which provides protection for consumers in the event that a financial services firm fails. The normal cover limit provided is £85,000 per person per financial services firm and protection applies to monies held within banks, building societies or credit unions that are regulated by UK regulators the FCA and PRA.

But did you know that deposit payments up to £1 million that are made in connection with certain events are also covered under the scheme’s ‘temporary high balance’ rules?

Introduced in July 2015, the extended protection was brought in to standardise the protection of money held in banks, building societies and credit unions across the EU. Under the temporary high balance rules, deposits over £85,000 are protected for up to six months from when the amount was first credited.

The types of ‘event’ that are covered under the scheme include:

  • Real estate transactions (property purchase, sale proceeds, equity release) relating to a depositor’s main or only residence
  • Benefits payable under an insurance policy
  • Personal injury compensation (unlimited amount)
  • Disability or incapacity (state benefits)
  • Claim for compensation for wrongful conviction
  • Claim for compensation for unfair dismissal
  • Redundancy (voluntary or compulsory)
  • Marriage or civil partnership
  • Divorce or dissolution of their civil partnership
  • Benefits payable on retirement
  • Benefits payable on death
  • A claim for compensation in respect of a person’s death
  • Inheritance
  • Proceeds of a deceased’s estate held by their Personal Representative

Whilst the standard £85,000 cover under the FSCS is widely known, this additional ‘temporary high balance’ protection has gone under the radar of many. However, it can actually apply in many situations. When in receipt of a settlement, proceeds from a property sale or another windfall, it’s important not to rush into making any decision. The temporary high balance cover provides peace of mind and space to think about what you want to do with your money.

For more details of the rules and how they apply, visit the FSCS website.

 

This entry was posted in Financial Planning. Bookmark the permalink. Both comments and trackbacks are currently closed.
  • Twitter

  • Testimonials

    My current investments are well on the positive side and I do thank you for your care and management of my financial affairs. I simply wouldn’t know how to manage them myself, and feel secure and confident knowing you are looking after these matters so professionally.
    I’m really impressed by how responsive you have all been to get this through against such a tight timescale.
    Whilst my client’s situation is obviously very complicated, you made it very straight forward – quite an art!
    On behalf of Walk & Talk Group, I would like to thank you for the most informative, enjoyable and appropriate presentation you gave. Members found the session of great value and very useful.
    I knew I had to start the ball rolling with getting our finances sorted but it was a hard thing for me to do as it cements the fact that our lives have changed forever. You made the whole process so much easier.
    We feel we can phone at any time during office hours if we need anything clarifying. Our financial adviser knows our personal circumstances and is in tune with our goals and lifestyle. His advice has been and continues to be excellent.
    It’s lovely for us to have nice friendly advisors like Jonathan and Morven.
    We are both very grateful for the time you spent with us in explaining various options. We certainly feel we now both have a much better understanding of our situation & the decisions which we need to consider moving forward.
    The professionalism of your service continues to give me confidence that we are pursuing the optimum route with our finances. The sound advice you provide is more critical than ever in the current climate.
    Thanks again for your advice, you have given me the kick I needed to take control and I’m very grateful for that.
Main Menu