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How safe are my savings?

We’ve all read heart-breaking stories of savers losing their hard-won nest-eggs – because of fraud, or bad advice.

But take heart because your cash savings, at least, are safe up to certain limits as long as you take reasonable care to protect them and that just means using some common sense. Woman holding egg

For a start, savings lodged with a UK regulated institution are protected by the Financial Services Compensation Scheme (FSCS) ( which is the UK’s compensation fund of last resort for customers of authorised financial services firms. Some savings including certain business accounts and, no big surprise here, funds that can be identified as having being obtained by money laundering or other criminal means, are not covered by the scheme.

Eligible deposits are therefore covered by the scheme for up to £75,000 per depositor if the bank, building society or credit union goes bust. The scheme will pay out up to the limit if – and this is important – a firm is unable, or unlikely to be able to pay claims against it. In effect, this is a deposit guarantee scheme against the failure, or probable failure of a financial institution.

This usually means companies which ceased trading or been declared ‘in default’ by the scheme. In general most banks and building societies in the UK are covered by the scheme and you can check if a firm is in default on its website.

This statutory body – funded by the industry itself – doesn’t cover just bank and building society deposits but also insurance policies, insurance brokering, investments, mortgages and mortgage arrangement.
Mark Neale, chief executive of the FSCS , estimated in 2015 that the £75,000 limit for savings protects more than 95 per cent of all consumers.

According to its own website, the FSCS has paid out more than £26bn since it was enshrined in 2001. Better still, they are supposed now to pay out usually within seven days of a default. BUT – and this is a large BUT – the FSCS will protect you only from institutional failure – not fraud or theft. Card fraud in the UK is a huge and growing problem - £341 million lost to villains in 2011 for a start – and we must all be on out mettle to keep that from inflating further.

If you have a bank or building society account, current or savings, the card issuer may pay up if you  are the victim of a crime but only under certain circumstances and these come down to you taking reasonable care to protect yourself. Essentially, if you don’t take reasonable care to keep your cards with you, and in sight, and protect your pin number – you could end up very disappointed indeed.

Most frauds are obvious but in this technical age many are increasingly more sophisticated and in order not to have a criminal help themselves to your savings, be they cash deposits or investments – even within some private pensions, you must take care or the losses will be yours and yours alone.
  • Bear in mind that no financial institution, bank or otherwise will ever ask you for your password over the phone.
  • No bank or building society will ever ask you for your credit or savings card numbers unless you have called them first.
  • Never, ever for whatever reason give your PIN number to anyone, especially over the phone.
The Family Building Society has issued plenty of information about how to protect yourself and your savings from crime – you can read them here:

So while, yes, your savings are protected – you still have a responsibility to keep them that way.

By Stephen McDowell

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Family Building Society
Ebbisham House
30 Church Street
Surrey KT17 4NL
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