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  • The Financial Services Compensation Scheme (FSCS) explained

    In financial services we often talk about and reference FSCS protection but what does it really mean for our savers? We have put this page together to explain exactly how the protection works and what it means to you

What is the FSCS?

The FSCS is funded by the financial services industry and is free to consumers. It is the body which gives you automatic protection of your savings up to £85,000 if your bank, building society or credit union goes out of business – and you’ll normally get your money back within seven days. It is there to protect your savings.

Which firms does the FSCS cover?

Only financial services firms that have been authorised by the Financial Conduct Authority (FCA) or the Prudential Regulations Authority (PRA) to do business in the UK are covered. So it’s always worth checking that the firm has an FCA or PRA authorisation number.

Protecting your savings

Deposits

A deposit is money in accounts like current and savings accounts, including Individual Savings Accounts (ISAs). Whether you’re an individual or a company, FSCS protects these deposits should your bank building society or credit union fail.

Compensation Limit

FSCS protects deposits up to £85,000 per person or company, per authorised firm.

Important points to know

  1. The limit applies to individuals and companies, NOT accounts. So for joint accounts the limit applies to each named account holder. For example, as long as you or the other account holder does not have any other accounts with the same firm, FSCS would protect up to £170,000 of savings in a joint account. This is because you each receive up to £85,000 under the scheme.
  2. The limit applies per authorised firm. This is important because some firms operate more than one brand under the same FCA or PRA authorisation number. This means although accounts are held under different brands you will only be entitled to a total of £85,000 or £170,000 if joint, as the firm has one authorisation number. You should therefore check:
    • Whether your deposits are with a bank or building society that shares an authorisation number with another brand of that firms, and
    • Whether your total deposits with all those brands are more than £85,000
  3. This does not apply to your savings with us, as we do not offer savings accounts under any other brand

Temporary high balances

FSCS also protects certain types of balances held by individuals above £85,000. These ‘temporary high balances’ are protected up to £1,000,000 for a period of six months. They are exceptional and short-lived deposits which result from certain major life events.

Deposits

Deposits which qualify as a temporary high balance are:

  • Money deposited in preparation for buying a property, the proceeds of a property sale or proceeds from releasing equity in a property. This applies to only your main residence and excludes buy-to-let properties or holiday homes. General savings for a property do not qualify
  • Money paid in relation to a marriage or civil partnership, or a divorce or dissolution of a civil partnership
  • A redundancy pay-out (whether voluntary or compulsory)
  • Compensation paid for unfair dismissal
  • Benefits paid in respect of a disability or incapacity. There is no limit to the compensation payable for deposits relating to personal injury or disability or incapacity claims
  • Benefits paid under an insurance policy
  • Compensation for wrongful conviction
  • Benefits paid on retirement
  • Benefits payable on death
  • Compensation in respect of a person’s death
  • A legacy from the estate of a deceased person or money held on behalf of a deceased person for the purpose of administering their estate

If a firm fails and you need to make a claim for deposits above £85,000 you will need to provide written evidence that your deposits qualify as a temporary high balance. Full details can be found at www.fscs.org.uk

FSCS & our promise to you

We know from speaking to our customers that FSCS protection is a key consideration when shopping around for a savings account. Every year we’ll provide you with a copy of the FSCS information sheet and exclusion list or, of course, you can find it below.

There can be changes to the scheme, so it’s always worth keeping informed.

Visit the FSCS website

Helpful Information

Making a claim
HOW TO CLAIM

To make a claim, visit www.fscs.org.uk where you’ll find all the information you need. You can either complete an online claim service form or call to ask for a paper application form.

WHAT IS THE PROCESS

Once all the relevant paperwork is received, your claim will be investigated and you’ll be kept up-to-date on progress. The investigation can take up to six months and occasionally can take longer.

At the end of the investigation, a decision will be made as to whether you have a valid claim and if the rules allow the FSCS to pay you compensation. The FSCS will be in touch to let you know whether your claim has been successful or not.

FSCS protected small logo
Your eligible deposits with Paragon Bank are protected up to a total of £85,000 by the
Financial Services Compensation Scheme (FSCS), the UK's deposit guarantee scheme.
See how you're protected
Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551