Are your building society deposits safe?
Over the last few months much of our attention has been focused upon UK banking sector where there have been significant failures and concerns across the board. However, while literally billions upon billions of pounds of UK taxpayers money is being poured into the banking sector, the building society sector has to date remained fairly trouble-free. However, the ongoing demise of the Dunfermline Building Society is a major concern for some investors although is there any significant risk to your deposits?
Firstly it must be stated that all building societies are part of the Financial Services Compensation Scheme which is exactly the same scheme applicable to the UK banking sector. In summary, the first £50,000 of any building society deposit is covered in full although customers who have seen their building society merged with others should be aware that if they operate under the same license then building society accounts which are part of the same group are effectively treated as one.
So if you have for example £40,000 in one building society account and £20,000 in another which is part of the same group, and trading under the same license, you will only receive £50,000 in compensation. It is worth taking professional advice when looking to deposit substantial funds, ensuring that protection is available and you are doing "the right thing".
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