I am aware that across Europe the €100,000 protection is increased in certain circumstances so I thought I check that the UK complies with this Regulation. They do.
So it actually depends on circumstances as sometimes there is more than £85,000 protection, for a limited time period.
The Financial Services Compensation Scheme (FSCS) provides a £1 million protection limit for temporary high balances held with your bank if it fails.
‘Temporary high balances’ are the result of specified major life events that lead to a large amount of money being held in a person’s account for up to 6 months.
A depositor with a temporary high balance may be entitled to receive additional compensation from FSCS of up to £1 million per life event.
Proceeds resulting from the following life events are categorised as temporary high balances:
Sums paid to the depositor in respect of:
*Real estate transactions (property purchase, sale proceeds, equity release)
*Benefits payable under an insurance policy
*Personal injury compensation (unlimited amount)
*Disability or incapacity (state benefits)
*Claim for compensation for wrongful conviction
*Claim for compensation for unfair dismissal
*Redundancy (voluntary or compulsory)
*Marriage or civil partnership
*Divorce or dissolution of their civil partnership
*Benefits payable on retirement
*Benefits payable on death
*A claim for compensation in respect of a person’s death
*Proceeds of a deceased’s estate held by their Personal Representative
The usual FSCS limit of £85,000 still applies to all other deposits held with your bank.
To verify a temporary high balance, FSCS may ask to review evidence such as court documents, legal correspondence or death or marriage certificates. The evidence required will depend on the life event that has resulted in the temporary high balance.
Sources: Handelsbanken employee and corroborated by the FCSC freephone helpline