FSCS compensation is reducing
Today the Government announced that from 1st January 2016 the FSCS compensation limit will be reduced from £85,000 to £75,000. This will achieve two things, firstly it will make some people panic that the reason must be due to some impending crash, the other will be that some people will need to shuffle £10,000 from various bank accounts into a different one.
In practice, the limit is reviewed every 5 years and was last reviewed in 2010. This is all based on European directives (yes another one), ingeniously entitled the Deposit Guarantee Schemes Directive, which is priced in Euros and is for the sum of €100,000 which is worth a bit less than it was in 2010, the pound and UK economy are stronger – hence revalued to £75,000. It is a little odd to make the announcement mid-Greek Euro crisis and of course we have the prospect of our own UK referendum on Europe.
Long story short, your protection is in place until the end of the year, but you will need to take action before then to move funds and open alternative deposit accounts.