What is the Financial Services compensation scheme?

Most people may be under the impression that because their bank is in the UK that means that they must be UK regulated, however this is not true of all banks.

Make sure your money is in a UK regulated bank, as if the bank was to run into financial issues the Financial Services Compensation Scheme (FSCS) would cover up to £85,000 of your money that was in that account. If the account is a joint account then it will cover you for £170,000 as you would be classed as 2 separate people and would cover you for £85,000 each.

Also one thing to watch is that this financial protection only covers you on a per bank basis. So if you have 2 different accounts with one banking institution with £85,000 in both of them, you would only be covered for £85,000. This is why it’s always a good idea to keep your money in a few different banks, so you are covered if any sort of financial issues arise for the bank.