What happens if your bank goes bust

Grainne Gilmore/ timesonline.co.uk, 14/9/2007

If your bank goes bust, all of your savings are not protected.

The Financial Services Compensation Scheme (FSCS) will make some reparation, but savers with more than £2,000 in savings will lose out.

The FSCS will pay out 100 per cent of the first £2,000 you have in savings and 90 per cent of the next £33,000.

So if you have £50,000 in savings, you will receive compensation totalling only £31,700.

The only organisation which offers a cast-iron guarantee that your savings will always be returned in full is National Savings & Investments, the government-backed savings institution.

Mortgage customers are in a different boat because they owe the bank money.

The likely outcome is that another lender would take over the mortgage book and existing mortgage deals would continue as normal.