The £31,700 question: is my money safe?

Author: By Julian Knight, Personal Finance Editor

Savings accounts, including those with Northern Rock, are protected by the Financial Services Compensation Scheme (FSCS). This is a safety-net funded by UK financial institutions. The idea is to refund savers if a bank or other financial institution goes under.

However, the level of compensation offered by the FSCS is tiered. This means that savers ? particularly those with lots of money in their accounts ? may only get part of their money back.

Savers are guaranteed to get 100 per cent of the first £2,000 of their money back. As for the next £33,000, the FSCS guarantees to refund 90 per cent of this money, making a guaranteed total of £31,700.

But what about people with more than £35,000? Whether or not they get all or just part of their money back is anyone’s guess.

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