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Compensation limits to be simplified

Compensation limits to be simplified

Category: Savings

Updated: 27/04/2009
First Published: 27/04/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Consumers will benefit from new compensation limits to be introduced next January following a review of the Financial Services Compensation Scheme (FSCS).

The changes are being made to give the limits greater consistency and therefore make it easier for consumers to understand the amount of protection they will receive if a firm goes out of business.

From 1 January 2010, the compensation limit for investments, mortgage advice and savings will be the same at £50,000 and all claims for non-compulsory insurance (both general and life insurance) will be paid at 90%, with no upper limit.

Loretta Minghella, chief executive of the FSCS, has welcomed the move, labelling the changes good news for consumers.

"They will be simpler and easier for consumers to understand and people will be able to see more clearly the protection the FSCS affords them. That will be good for consumer confidence which also benefits the financial services industry."

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