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The Financial Services Authority (FSA) has increased the limit of Financial Service Compensation Scheme (FSCS) cover for deposits to 100% of the first £35,000 of each depositor's claim. This increase applies from 1 October 2007.
The previous compensation limit was a maximum of £31,700 (100% of the first £2,000 and 90% of the next £33,000 of depositors' eligible claims).
Clive Briault, FSA Managing Director of Retail Markets, said: "At a time of market uncertainty it is important for consumers to know their deposits are properly protected. The action we have taken is designed to help reassure depositors with accounts up to £35,000 that they are 100% covered. The Government has indicated that it will propose further changes relating to financial services compensation arrangements in the UK designed to give consumers confidence that their savings and deposits are safe and secure."
The FSA will work closely with the Government and the FSCS on the forthcoming review of compensation arrangements.
