As part of the changes, cover for deposits has been increased to 100 per cent of the first £35,000 of each depositors claim, increasing from the previous maximum of £31,700.
Commenting on the changes to the FSCS threshold, Clive Briault, managing director of retail markets at the FSA, said: “At a time of market uncertainty it is important for consumers to know their deposits are properly protected. The action that we have taken is designed to help reassure depositors with accounts up to £35,000 that they are 100 per cent covered.”
He added that government pledges would help to further raise confidence in the market.
John Howard, chairman of the Financial Services Consumer Panel, welcomed the change, but urged for more action to further safeguard consumers.
He said: “Guaranteeing 100 per cent of the first £35,000 held on deposit is a sensible first step in giving consumers more confidence in the safety of their savings. We are pleased that the Treasury and the FSA are also considering changing the upper limit. We believe that the present £35,000 guarantee is too low but recognise that any increase will need to be funded, and are conscious that consumers are likely to bear at least part of that cost. So a balance needs to be struck between a sensible upper limit and the total cost of the scheme.”
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