Savings Compensation - Savings - News - Moneyfacts


Savings Compensation

Savings Compensation

Category: Savings

Updated: 29/01/2009
First Published: 28/01/2009

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 It is now over 6 months old so the content may be out of date.

The Post Office has a selection of savings accounts, which are provided and run by the Bank of Ireland. In the last few weeks, many of the Post Office's 500,000 savings customers, will have received letters advising them that they are no longer covered under the UK's Financial Services Compensation Scheme (FSCS) but instead are covered under the Irish Deposit Guarantee Scheme (IDGS). Customers of Anglo Irish Bank, the recently nationalised bank, have also found themselves in a similar situation.

The Post Office and Anglo Irish Bank were never fully fledged members of the FSCS. Until recently if an Irish Bank failed, savers would claim compensation under the Irish Scheme and then would be topped up by the FSCS to receive the same level as UK savers. In September 2008, the IDGS increased its cover to €100,000 per person per deposit taking institution. By comparison, UK customers are covered up to £50,000 per person per deposit taking institution.

As the IDGS level of cover is now more than the FSCS scheme, there is no need for savers, money to be topped up if a bank failed, so they no longer need to be linked with the FSCS. Any money in six Irish banks, including Anglo Irish Bank and Bank of Ireland, is currently 100% covered by the Irish Government, but this expires in September 2010, after which it will be covered up to the current €100,000 limit.

Despite the fact that savers covered under the Irish scheme receive a higher level of compensation if one of their banks failed, many savers are unhappy about no longer being covered under the UK scheme and want to move their money away. The search for a perceived safe haven has become fundamental for savers looking for a new account, but they do not want to relinquish getting the highest rate of return for their money.

With numerous cuts in base rate, half of accounts on the market now pay a rate of 1% or less, therefore it is imperative that you shop around for a good deal. Rates of over 3.5% can still be found on a number of accounts. Sites such as, allow you to input your personal circumstances and find the best account for your needs. That way you can make the most of your money at this difficult time.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Savings being used as a festive financial buffer

Good news from RCI Bank UK – its latest research shows that many of us are saving more than we were a year ago, but the question is, will you be dipping into that buffer to cover the cost of Christmas?

6 of the best easy access savings accounts

Easy-access savings accounts are as simple as they sound – they allow you to access your money whenever you need it, without having to give advance notice, and they also allow you to pay into them at any time. Here are six of the best.

Start saving for Christmas… 2017!

Christmas is just around the corner and our annual festive splurging is starting to step up, but are you prepared? It may be too late to start saving for this year’s festive spend, but it’s never too early to start for next year’s!