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August 3, 2009    

FSCS pays £21bn to protect UK savers

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by Kay Murchie

The Financial Services Compensation Scheme (FSCS) has revealed a staggering £21 billion has been paid out to UK savers in the six months after the onset of the credit crisis.

This compares with £1 billion in the seven years prior to the credit crisis.

The FSCS, which is the body established to compensate victims of banking failures, reimburses up to £50,000 per saver if a bank collapses, paid for by the UK financial services industry.

According to the report, the Icelandic banking collapse was primarily responsible for the payouts of savers in Bradford & Bingley; Landsbanki Islands’ UK savings arm Icesave; Heritable Bank; Kaupthing Singer & Freidlander and London Scottish Bank.

Currently, payouts for savers with collapsed banks can take up to six weeks but the Financial Services Authority (FSA) announced last week that, from 31 December 2010, savers would be compensated within 20 days and preferably within 7 days.

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