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Consumers should be told when their savings are unprotected, say MPs

Consumers should be told when their savings are unprotected, say MPs
24/04/2013

11 Apr 2013

Banks should be obliged to inform customers when their savings surpass the amount that is protected under the Financial Services Compensation Scheme (FSCS), according to MPs.

Under the FSCS, the first £85,000 of savings per person, per institution are guaranteed if a UK bank, building society or credit union goes bust.

The scheme does not, however, protect savings above this threshold.

Of the MPs questioned, 81% agreed that banks and building societies should warn people when their deposits go over the limit.

The general population also appears to favour this approach, with 76% of the consumers surveyed suggesting that the banks should give this alert automatically.

Commenting, FSCS chief executive, Mark Neale, said: ‘It is too late for people to find out about the FSCS when a run on a bank starts.

We believe firms can, and should, do more.

‘Importantly, MPs and the public also support people being told when they exceed the compensation limit. We hope firms will take up the challenge and continue working with us to improve awareness of the scheme.’

More than 4.5 million people are thought to have benefited from the FSCS, which has paid out over £26bn since 2001.

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