Is a Reduction in Protection from our Banks worrying?

Should UK Banking customers, investors and businesses be worried about this?

The Financial Services Compensation Scheme (FSCS) is a deposit protection scheme that provides a level of cover for your money should anything happen to your bank, building society or credit union. We wanted to let you know that the deposit protection limit is changing from 1 January 2016. This change applies to all banks, building societies and credit unions in the UK.

What's changing

•For individuals: the level of cover is reducing from £85,000 to £75,000 per bank, building society or credit union

•For joint account holders: each account holder will have a level of cover up to £75,000

•For Business, Commercial & Corporate accounts protected by FSCS prior to 3 July 2015 and from that date onwards: the level of cover is reducing from £85,000 to £75,000 per bank, building society or credit union

In addition, from 3 July 2015, eligible deposits of large companies and small local authorities are also eligible for FSCS protection. For these customers the £75,000 deposit protection limit was immediately applicable, since these deposits had not previously been protected.

Please familiarise yourself with FSCS compensation arrangements including information on deposits excluded from protection by clicking here and by visiting or by

This is a reserves issue and a worrying one, it means if you have your life savings with any bank and they exceed 75,000 GBP or equally as bad if you run your business and maintain a balance higher than 75,000.00 GBP you can lose it with no come back or compensation from any source.

It would be interesting to know how many accounts are above this level and to what degree versus how many are or would be unaffected. It must be assumed that most would be unaffected but for those that are or would be, could and would spill over to impact on those accounts that are under the new threshold.

LEHMAN BROTHERS, On September 15, 2008, Lehman Brothers filed for bankruptcy. With $619 billion in debt, Lehman's bankruptcy filing was the largest in history with 25,000 employees worldwide. Lehman's demise also made it the largest victim, of the U.S. subprime mortgage-induced financial crisis that swept through global financial markets in 2008. Lehman's collapse was a seminal event that greatly intensified the 2008 crisis and contributed to the erosion of close to $10 trillion in market capitalization from global equity markets in October 2008, the biggest monthly decline on record.

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