By Phoebe Seers
LONDON (Reuters) -British savers will have up to 120,000 pounds ($158,000) of their money protected in the event of a bank failure, the Bank of England said on Tuesday after increasing the deposit guarantee limit by 40%.
The current Financial Services Compensation Scheme (FSCS) cap of 85,000 pounds was set in 2017. The Bank of England’s Prudential Regulation Authority (PRA), which had previously proposed an increase to 110,000 pounds, said it opted for a higher threshold to reflect persistently high inflation.
“This change will help maintain the public’s confidence in the safety of their money,” said PRA Chief Executive Sam Woods.
The new cap exceeds the European Union’s harmonised 100,000 euro ($115,860) limit but remains below the limit in the United States, where coverage is at least $250,000 per depositor.
The FSCS is funded by the industry and compensates customers when a bank or building society collapses. The cap for certain temporary high balances – such as proceeds from a home sale – will rise to 1.4 million pounds from 1 million pounds, the PRA also announced on Tuesday.
($1 = 0.7590 pounds)
($1 = 0.8631 euros)
(Reporting by Phoebe SeersEditing by Tommy Reggiori Wilkes and David Goodman)
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