Currently people in the UK enjoy a bank deposit guarantee of £85,000 when money is held at any authorised deposit taker (such as a bank, building society or credit union). The compensation limit of £85,000 applies to each depositor for the total of their deposits with a particular bank, regardless of how many accounts they hold.
If a person holds more than £85,000 in deposits, providing they spread their deposits across a number of banks they can ensure the whole sum is covered by the guarantee. However, for people who hold multiple accounts in banks that are part of a larger group, if each of the banks is separately authorised by the Financial Conduct Authority the FSCS would pay compensation up to the limit of £85,000 per authorised institution. If each of the banks is covered by a single authorisation the FSCS would pay compensation up to the limit of £85,000 irrespective of how many different institutions a person held accounts with.
The FSCS has announced that from 1 January 2016, the deposit guarantee will be lowered to £75,000. This change is as a result of the EU’s Deposit Guarantee Scheme Directive which fixes a limit across Europe of 100,000 Euros (or equivalent). This is as a result of the recent fall of the value of the Euro against Sterling largely brought about by the crisis in the Eurozone.