Page last updated at 15:59 GMT, Monday, 3 October 2005 16:59 UK

Ask the expert: Are my savings safe?

A roulette wheel
Savers money is protected by an industry wide scheme

BBC News Ask the Expert column gives readers a chance to have their financial questions answered.

Brian Capon from the British Bankers' Association helps Your Money reader Elisabetta Tenenti.

Mrs Tenenti would like to know how safe are her savings and what kind of protection do savers have in the event of a UK regulated bank or building society going bust?

Brian Capon writes:

Deposits with all authorised banks and building societies in the UK are protected under the financial services compensation scheme (FSCS).

The scheme covers the first 2,000 in full and 90% of the next 33,000 if a firm is unable to pay claims against it, for instance where a firm stops trading or is insolvent.

Do you have a question?

The maximum amount that each person can receive under the scheme is 31,700.

For the purposes of the scheme, where an account is held in joint names, each joint account holder will be treated as holding an equal share of the funds in an account, unless there is evidence to show otherwise, and will be entitled to claim compensation on their share.

If a depositor owes money to the bank or building society, this will be deducted from any deposits held before compensation is calculated.

The independent scheme is funded by a compulsory levy on the financial services industry.

More information on the financial services compensation scheme, which also covers insurance and investments can be found on the FSCS website www.fscs.org.uk.

You can check whether a firm is properly authorised through a useful search facility on the Financial Services Authority website www.fsa.gov.uk.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Always obtain independent, professional advice for your own particular situation.


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