Members should be aware that some changes are being made to the Financial Services Compensation Scheme (FSCS). In particular there is a reduced protection limit which will apply to all banks, building societies and credit unions from the beginning of next year.
From 1st January 2016 the maximum amount of protection from the FSCS will be reduced from £85,000 per eligible depositor to £75,000.
This change has been made by the Prudential Regulation Authority (PRA) and applies across the financial services industry. The PRA is obliged to calculate the limit of protection every few years to ensure it still matches the 100,000 euro limit set out in the relevant EU directives. This year the PRA has calculated that based on the sterling/euro exchange rate at the time of the calculation the limit has had to be reduced.
The protection limit applies to the aggregate balance held with each authorised deposit taker. This means that deposits in any of the accounts you hold with us, including savings accounts, Current Accounts and Bristol Pound accounts, are added together to determine the total balance that is eligible in the event that deposit protection had to be applied.
If your balance with any one deposit taker is, or becomes, higher than the new protection limit then you should consider carefully whether to retain this higher balance with one institution, or whether it is better for your own protection to make sure that any excess balance is deposited with another deposit taker.
Donít forget that some deposit takers operate under multiple names, but with only one banking licence and therefore compensation scheme protection may apply only once across their various trading names.
We have written individually to all members with higher balances held with BCU, and we will be providing further details of changes to all members over the coming year.
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