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MS: Financial Services Compensation Scheme


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Mr Speaker

Following consultation with the FSCS and the Bank of England, I am confirming today the following changes to the Financial Services Compensation Scheme.

Currently, 100% of the first £2,000 of deposits and 90% of the next £33,000 are covered by the scheme. 

As part of our review of the Northern Rock experience, mindful of ongoing challenges in financial markets, and bearing international moves in mind, I am announcing today that the FSCS will guarantee 100% of deposits up to £100,000. This will cover more than 98% of savers completely. This increase in cover will apply for two years, and its permanent level will be considered by a broader review of the banking system.

Mr Speaker, our swift actions on Northern Rock and on the broader financial sector have prevented a major financial collapse in this country, and I have every confidence that this measure will prove precautionary. However, I hope the House can agree that providing this guarantee to savers is fair and proportionate.

Katherine West

Conservative MP for Watford (2007 - )

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