Banks should inform their savers when their money exceeds the maximum amount protected under the Financial Services Compensation Scheme (FSCS), MPs have advised.
Under current FSCS rules savings are protected up to £85,000 per person, per UK based institution. When asked by the FSCS, whether savers should be informed of this, 81% of MPs agreed, and according to a separate poll, around 76% of customers agreed that their should be an automatic alert if their savings exceed the limit protected by the FSCS.
In the United States, information regarding the amount protected by comparable institutions has been routinised into the banks advertising policies, and the FSCS chief executive, Mark Neale, warned that current levels of information within the UK were not substantial enough.
"It is too late for people to find out about the FSCS when a run on a bank starts. We believe firms can, and should, do more," he said.
Currently, £85,000 is protected per individual, per institution. However each institution may have a number of banks of different names which operate under a single banking licence, this means that savers who have more than £85,000 may want to consider spreading their money across banks that operate under different licences in order to achieve maximum protection.
The FSCS said that it is running an awareness campaign in an attempt to clarify this message.
A statement from the British Bankers' Association (BBA), which represents UK banks read:
"The BBA fully supports the public awareness programme around the FSCS deposit protection limit of £85,000.
"Banks promote awareness of the scheme, which is funded by the industry, through a number of ways including messaging on bank statements and branch posters. Meanwhile, 98% of individual accounts are fully covered at £85,000 and so any changes to the regime must be proportionate."