On 30 January, the compensation limit for deposits with banks, building societies, credit unions and other firms authorised by the Prudential Regulation Authority in the event of a firm’s insolvency was increased from £75,000 to £85,000. The limit for joint accounts was increased to £170,000.
A 5-month transitional period gives the firms until 30 June 2017 to make necessary changes to material for customers and carry out training to update customer facing staff.
The deposit protection limit was previously set at £85,000 between 31 December 2010 and 3 July 2015 but was then reduced to £75,000 after being reviewed in accordance with the Deposit Guarantee Schemes Directive (DGSD).
‘Deposit protection limit – PS1/17’ provides PRA’s response to feedback to Consultation Paper 41/16 ’Deposit protection limit’, which proposed the return to the £85,000 limit.
It also describes changes, made as a result of feedback, that
- allow firms greater flexibility to make changes as soon as possible during the transitional period to materials for customers
- remove the requirement for them to notify the PRA that the changes have been made
Appendix 1 sets out the final rules, while ‘Depositor and dormant account protection – SS18/15 Update’ links to the updated Supervisory Statement (SS) 18/15 ‘Depositor and dormant account protection’ in Appendix 2.