Up to £1 million of savings to be protected

The Bank of England wants to extend deposit protection for British savers up to £1 million.

Currently, the first £85,000 you save with any financial institution is protected by the Financial Services Compensation Scheme (FSCS) in case the bank or building society goes bust.

However, the Bank of England wants to extend this to up to £1 million for temporary high balances. This additional protection would be in place for up to six months after the money was deposited. This would be particularly useful if you have just sold a property, for example, or received a large inheritance. But it wouldn't apply permanently.

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Other ideas

The proposal is just one of a number of ideas the Bank of England has put forward to improve the strength of the financial sector should the economy take a turn for the worse again.

Other ideas include speeding up FSCS payouts from 20 working days to seven and increasing the level of FSCS cover for certain insurance policies (such as annuities and other forms of income) to 100%.

The consultation on the plans ends on 6th January 2015.

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