HBOS & Lloyds - Are your savings safe?

Turmoil inthe financial markets; naturally makes consumers worry about the safety of their savings but unless they have more than £35K with a savings provider then there is no need to fret.

The Financial Services Compensation Scheme, covers 100% of the first £35K, per person, per deposit taking institution. Therefore, if you ensure that you don't have more than this limit with any one provider, if in the unlikely event the worst should happen, you will get all your money back.

As each individual person is covered if a couple have up to £70K in a joint account, then in the event of a bank failure they can both claim separately up to the £35K limit to get back all their savings.

However, savers need to be vigilant as if the institutions are registered under one banking licence, they will only be covered once.

For example Bank of Scotland, Halifax, Birmingham Midshires, Intelligent Finance and SAGA are all covered under the Bank of Scotland banking licence. This means that if you had £35,000 with each of them, should they all have problems repaying your money, you would only receive £35,000 back from the Financial Services Compensation Scheme, not £175,000. However, the Sainsbury Bank brand which is part of the HBOS group has a separate licence.

The situation varies from institution to institution. NatWest, Royal Bank of Scotland, Tesco Personal Finance, Ulster Bank and Coutts & Co are all part of the same group, but all have separate licences. Thus, if your money was with each of them, you would receive up to the full £35,000 back from each company.

In order to find out if the institutions where you savings are held are covered separately the best thing to do is to either log on to the FSA's website and check if the firm is authorised. Alternatively, you could contact the FSA's consumer website www.moneymadeclear.fsa.gov.uk or call their helpline on 0845 606 1234.

If you are planning on opening a new account with an institution, make sure you know which institutions your existing savings are with. Then when you contact the new institution, check with them that they are not part of the same group and covered by the same banking licence.