Banks to improve saving protection publicity

New rules mean banks, building societies and credit unions will have to prominently display posters and stickers in branches and on websites explaining which deposit guarantee scheme applies to their customers' deposits. The Financial Services Authority (FSA) wants the change to take effect from 31 August this year. After this date, if customers are using the UK branch of a foreign bank from the European Economic Area (EEA), posters will have to set out that those customers are not covered by the UK's Financial Services Compensation Scheme (FSCS), but by the bank's national scheme instead, which will need to be specified. "Customers need to feel confident about their money and to do this they need to know what the compensation limits are and which scheme would provide cover in the event of a bank, building society or credit union failure," said Andrew Bailey, FSA director of UK banks and building societies. "Too many people assume that because their branch is located on a local high street in the UK, they are covered by the FSCS. This is not true for UK branches of EEA banks where the home country's deposit guarantee scheme applies." The regulator has published prescribed wording in order to assist the various banks, building societies and credit unions.

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Banks increase SVRs

Five banks increased their standard variable rates (SVRs) yesterday, with more than one million homeowners to be affected. Bank of Ireland, Clydesdale and Yorkshire Banks, Co-operative Bank, Halifax and Royal Bank of Scotland/NatWest all increased their SVRs. The bank with the most affected customers is Halifax, with around 850,000 customers hit by the 0.49% increase, with the SVR rising to 3.99%. Estimates by Which? suggest that the upturn in SVRs could add £300 million to the UK's mortgage bill over the next 12 months. "Our advice to anyone struggling with their mortgage repayments is speak to your lender straight away," Which? chief executive, Peter Vicary-Smith said.

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