FSA increases compensation limit to £50,000

by Richard Kilner

Story link: FSA increases compensation limit to £50,000

In response to the continuing financial turmoil across the world, the Financial Services Authority (FSA) has raised the compensation threshold for bank deposits from £35,000 to £50,000.

The change, made today, takes effect from 7 October, and applies to each customer’s claim.

Those who hold joint accounts will be able to claim £100,000.

Hector Sants, chief executive of the FSA, has stated that the increased threshold has been put into place in an effort to provide clarity following extensive discussion regarding compensation.

Sants added that the move tied in with the proposed Banking Bill in Parliament, which will be seen next week.

The legislation will be introduced in a bid to bolster battered consumer confidence in Britain’s banking sector.

The FSA intends to consult regarding possible further reforms, such as an even higher compensation limit, the speed of payout and other areas.