04 April 2008
Are my investments protected?
Recently, many people have been concerned about their legal rights in the case of a bank or other provider being unable to meet its obligations.
Investor protection is mainly provided by the government’s Financial Services Compensation Scheme and depends on the type of investment.
UK bank and building society deposits, following the run on Northern Rock, are now covered up to £35,000. Until the recent change in the rules, the maximum pay-out was £31,700 for deposits of £35,000 or more. The Chancellor, Alistair Darling, has suggested that these limits will almost certainly increase.*
UK investment products, such as unit trusts or OEICs, that were sold after 27 August 1988 are 100% covered for the first £30,000 and 90% covered for the next £20,000, making the maximum pay-out of £48,000 on £50,000 of investments.
UK life assurance policies are covered for 100% of the first £2,000 and 90% thereafter, with no cash ceiling, although the 90% figure could be cut back if an independent actuary considered the original benefits excessive.
For further information contact Paul Tobias, Trust & Investment Department, on 01483 887766.
*Speech by the Rt. Hon Alistair Darling MP, 1 October 2007.