Banks ‘should give savings warning’
Banks should be compelled to warn people when their savings breach the amount that would be protected if their provider went bust, according to a survey of MPs and consumers.
Some 81% of MPs surveyed for the Financial Services Compensation Scheme (FSCS) said that banks and building societies should have to make it clear to savers when their deposits exceed the £85,000 compensation limit that anything above this amount is not protected.
There was also widespread backing among the population generally for the idea of financial institutions being forced to do this, with 76% of consumers surveyed also agreeing that this should happen.
The FSCS is the UK’s savings safety net, which is funded by an industry levy and covers up to £85,000 for single accounts and £170,000 for joint accounts if a financial institution goes bust.
The body, which has previously acknowledged that its own publicity efforts have not increased awareness to the levels it had hoped, wants to see financial institutions doing more to increase awareness about compensation limits in their routine dealings with customers, such as in their advertising.
It has raised concerns that awareness about compensation limits is still too low, with a previous study in December finding that just 12% of people know exactly how much of their money would be protected if their bank went under.
The lack of awareness has persisted despite rules coming into force last August which mean that banks, building societies and credit unions must prominently display stickers or posters publicising compensation levels.
The savings safety net’s latest research also found that more than three-quarters of MPs believe that banks and building societies should include information about the FSCS in their advertising and four-fifths agree that increasing awareness of the body would boost consumer confidence and financial stability.
FSCS chief executive Mark Neale said that awareness about savings compensation is generally high in the United States, where financial institutions routinely include such information in their advertising.
He said: “It’s too late for people to find out about FSCS when a run on a bank starts. We believe firms can, and should, do more. Importantly, MPs and the public also support people being told when they exceed the compensation limit. We hope firms will take up the challenge and continue working with us to improve awareness of the Financial Services Compensation Scheme.”
Latest posts by Silversurfers Editor (see all)
Leave a Comment!
Community Terms & Conditions
These content standards apply to any and all material which you contribute to our site (contributions), and to any interactive services associated with it.
You must comply with the spirit of the following standards as well as the letter. The standards apply to each part of any contribution as well as to its whole.
be accurate (where they state facts); be genuinely held (where they state opinions); and comply with applicable law in the UK and in any country from which they are posted.
Contributions must not:
contain any material which is defamatory of any person; or contain any material which is obscene, offensive, hateful or inflammatory; or promote sexually explicit material; or promote violence; promote discrimination based on race, sex, religion, nationality, disability, sexual orientation or age; or infringe any copyright, database right or trade mark of any other person; or be likely to deceive any person; or be made in breach of any legal duty owed to a third party, such as a contractual duty or a duty of confidence; or promote any illegal activity; or be threatening, abuse or invade another’s privacy, or cause annoyance, inconvenience or needless anxiety; or be likely to harass, upset, embarrass, alarm or annoy any other person; or be used to impersonate any person, or to misrepresent your identity or affiliation with any person; or give the impression that they emanate from us, if this is not the case; or advocate, promote or assist any unlawful act such as (by way of example only) copyright infringement or computer misuse.
Nurturing a safe environment
Our Silversurfers community is designed to foster friendships, based on trust, honesty, integrity and loyalty and is underpinned by these values.
We don't tolerate swearing, and reserve the right to remove any posts which we feel may offend others... let's keep it friendly!