Savers have just days to move money to different bank accounts, as from January 1st new rules come into force limiting compensation that can be received should a bank go bust.

The new legislation which will reduce compensation to £75,000 per account, per institution, compared to the £85,000 available through the Financial Services Compensation Scheme (FSCS) now. Joint accounts will see protection cut from £170,000 to £150,000.

The FSCS is advising those with more than £75,000 in one account to move money into another to gain full protection. However separate registered banks that operate under one brand, for example HSBC and First Direct, are only liable for £75,000 in total – even across two accounts with the different banks. Savers would then be advised to move excess money to a different bank entirely.

Similarly, if you have money in an ISA, the situation is further complicated. You can only open one cash Isa a year, so be careful if that ISA account was opened this year.

24/12/2015