6th January 2016
Over half of UK adults are unaware that the protection limit for bank savings has been reduced.
From 1 January the compensation limit for bank deposits offered by the Financial Services Compensation Scheme (FSCS) has been reduced from £85,000 to £75,000.
The reduction in the limit brings the UK in line with the EU-agreed limit of €100,000. The UK limit is reviewed every five years and the recent strength of sterling compared to the weakness in the euro meant the exchange rate on the European limit of €100,000 had fallen to £75,000.
RCI Bank found that 54% of UK adults are not aware of the fall in the level and a third do not know what the FSCS is. More than two in 10 (21%) knows what it is but do not know what the level is or that it was reduced.
Another 41% were aware of the reduction in the limit but 31% said it doesn’t bother them and they won’t be moving their savings.
Just 6% of people said they would move their saving to ensure full protection and 4% had already opened another account.
When opening a new savings account, the most important consideration was interest rates (60% of people said this), with online access coming second at 46$ and ease of opening came in third at 34%.
Having savings protected by a deposit scheme was important for just 22% of people.
Steve Gowler, chief executive of RCI Bank, said: ‘The FSCS changed its protection levels limits to realign the UK with the deposit schemes across Europe, which are all protected at €100,000. Our insight has found that more than half of savers are still unaware that their level of protection has decreased in recent days.’
He noted that savers in foreign banks were protected under the schemes of their home country.
‘Last year we saw a record number of new foreign entrants appearing in the UK savings tables who are protected up to €100,000 by their home schemes, including RCI Bank which is protected by the French scheme,’ he said.
‘As these new entrants offer similar levels of protection to the UK’s FSCS £75,000 limit as well as competitive rates, UK savers seem more willing than ever to try them out – and we see this trend continuing in 2016. As always, it is important that savers do their research, and ensure that they are comfortable with the level of protection offered by their bank.’