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SAVERS will be able to sleep a little easier this year after new moves to safeguard them against a fresh financial crisis.

The amount of compensation investors can claim if their bank or building society goes bust increased to pounds 85,000 yesterday, from pounds 50,000.

The move is part of a Europe-wide requirement for countries to offer compensation equivalent to 100,000 euro.

The Financial Services Authority said the higher total would cover the "vast majority" of UK savers.

At the start of the banking crisis in 2007, the maximum payout was just pounds 31,700 per person, made up of 100% of the first pounds 2,000 and 90% of the next pounds 33,000.

When Northern Rock went bust that year it quickly became clear that was not enough as savers raced to withdraw their money.

In October 2007, the Financial Services Compensation Scheme limit was raised to pounds 35,000 and then to pounds 50,000 a year later.

The new rules also aim to give claimants their money much faster than before - mostly within seven days. But it will do nothing to ease the other major concern of savers - rock bottom interest rates.
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Title Annotation:Business
Publication:The Mirror (London, England)
Date:Jan 1, 2011
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