Consumers
Are my investments safe with a building society?
| Print page | Email |
People who put their money into a building society account are automatically covered by the Financial Services Compensation Scheme.
On 3 October 2008 the Financial Services Authority announced that, from the 7th October 2008, savers would be entitled to 100% compensation on the first £50,000 invested.
The compensation limit applies to each saver for the total of their savings with a building society, regardless of how many accounts they hold or whether they are a single or joint account holder. In the case of a joint account FSCS will assume that the money in that account is split equally between account holders, unless evidence shows otherwise. This means that each account holder in a joint account would be eligible for compensation up to the maximum limit. The maximum amount covered for a couple, for example, would be £100,000.
However, no investor has lost money with a building society since at least 1945 and probably for a long time before that.
On 27 November 2008 the FSA announced that where a saver has accounts with two merging societies - and both brand names are retained - they will be protected at £50,000 per brand. For joint accounts this will be £100,000 per brand. On the 4 June 2009 the FSA proposed to extend this arrangement until December 2010. Further information can be found in the FSA press releases, linked to below.
Further information can be found in the Financial Services Compensation Scheme booklet for consumers, linked to below.
If you have invested in Permanent Interest Bearing Shares (PIBS) please see our question What are PIBS?, linked to below.
Links:
Financial Services Compensation Scheme's Guide for Consumers
Financial Services Compensation Scheme homepage
FSA press release on building society mergers
FSA press release on the extension of the scheme regarding building society mergers
Back to the FAQ List
