With instability dominating the financial world at present savers are keen to know that wherever they invest their money it will be safe and covered should there be a financial meltdown and the company holding their funds go bust! With this in mind UK savers will be glad to hear of a new initiative by the EU that is set to see the compensation available to them increased considerably.
At present under the UK depositor's compensation scheme savers have their invested money covered up to the first £50,000 for each institution funds are held at. This means that should the company where the saver has invested go bust, they will be entitled to claim back at most £50,000 from the government run compensation scheme. However, the new initiative from the EU will introduce a scheme where by all EU savers are covered up to €100,000, a figure that currently equates to roughly £85,000. This will come as a great boost to the UK savers and will encourage prospective savers to invest their funds in financial institutions safe in the knowledge that they are now covered by a significantly increased amount of £85,000.
As mentioned this will come as a great boost to the financial sector and act as a stimulant for people to save. In a time where government is encouraging people to save, actually doing so hasn't, up until now, been attractive, with the instability of financial institutions and low interest rate not so appealing.
All forms of savings accounts whether fixed rate bonds, isa's or even cash isa's will be covered under the new EU compensation scheme, should the scheme go ahead.
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