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Who Owns Who? Protecting Your Money Under FSCS Rules

Jennifer Birtles 10th Jul 2020 One Comment

Reading Time: 7 minutes

Protecting your finances is crucially important. Especially when we’ve seen in the past two decades how quickly circumstances can change and how damaging it can be. While there are FSCS rules in place to help protect people, there are limitations to how much claimants are eligible to, and certain criteria have to be met.

Make sure you’re putting your money in the right place by understanding who owns which banks – and understand which assets are covered by the FSCS rules – in this quick guide.

Why Protection Isn’t Straightforward

FSCS rules mean your money is protected - but it's not straightforward

As banks all have different branding, it’s easy to assume you’re putting your money into different banks.

In fact, a lot of banks are grouped together under the same licence. This happens a lot – either separate banks are bought by others, or a different brand is created by an existing bank.

Meaning if your bank went under, then the amount of compensation you receive is impacted by how much money you have spread across that banking group, rather than in the individual bank. You might think your money is totally protected if, for example, you have £85,000 in a First Direct account and £45,000 in an HSBC account. However, you’d lose cover for £45,000 of your capital, because they’re operated under the same license.

No one wants to be at a potential risk to losing large sums of money due to misinterpreting a technicality, so we’ve put together a comprehensive guide so you know where to put your money to ensure it’s safety.

fscs rules

So, what are the FSCS rules – and how does it affect where you stash your cash?

  • FSCS protects up to £85,000 per individual, per banking licence. If you and your partner have a joint account, then the FSCS will protect you up to £170,000 under the one banking licence.
  • The FSCS was set up to assist private individuals but some small businesses and limited companies with low turnovers are covered. If you are in doubt you can check here. You can also compare business banking accounts to find the right one for you.
  • FSCS rules also allow protection on certain qualifying temporary high balances. Included in this are balances of up to £1 million for up to 6 months from when the amount was deposited. Reasons for a sudden high balance include, but are not limited to, injury compensation, a redundancy payout, or an inheritance. You can find the full list provided by the FSCS here.
  • Some pensions are protected by the FSCS as well as banks and building societies. Generally, the FSCS will be able to protect pensions that are provided by UK-regulated insurers and qualify as “contracts of long-term insurance”. There is more information on Pension Provider failures on the FSCS site where you can also check your eligibility to claim.
  • If a credit unions is authorised by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) then the FSCS will protect up to £85,000 per individual.

Any claim submitted to the FSCS will only be paid if it meets all their requirements and you are eligible for the claim you’re making under FSCS rules.

Who Owns who?

The key thing to remember about FSCS rules is that they will guarantee up to £85,000 per individual, per banking licence. There are plenty of banking groups and banks operating under single licences that all your money can be protected, as long as you know where to put it.

bank of scotland plc

  • Aviva
  • Bank of Scotland
  • Birmingham Midshires
  • Halifax
  • Intelligent Finance


  • Lloyds Bank
  • Cheltenham & Gloucester

royal bank of scotland

Although part of the same banking group, all three RBS subsidiaries Coutts, Natwest, and Ulster Bank operate under their own banking licences. Therefore, you could have up to £85,000 in all four banks and still be fully protected.

santander UK PLC

  • Cahoot
  • Santander

barclays Bank plc

  • Barclays Direct (formerly ING Direct)
  • Standard Life Cash Savings
  • Barclays Bank

the co-operative bank plc

  • Britannia
  • Smile
  • The Co-Operative Bank

hsbc bank plc

  • First Direct
  • HSBC

Note that while M&S Bank is part of the HSBC group they operate under their own banking licence. You would be fully protected on up to £85,000 in M&S, despite what you already hold in First Direct and HSBC.

bank of ireland uk plc

  • AA Financial Services
  • Bank of Ireland UK
  • Post Office

clydesdale bank (cybg)

  • Clydesdale Bank
  • Yorkshire Bank
  • Virgin Money

Building societies have separate groups to banks.The difference between banks and building societies is that while banks are listed on the stock market, building societies have no external shareholders. Rather, the mortgage borrowers and account holders are members who make decisions.

nationwide building society

  • Cheshire BS
  • Derbyshire BS
  • Dunfermline BS
  • Nationwide BS

yorkshire building society

  • Barnsley BS
  • Chelsea BS
  • Norwich & Peterborough BS
  • Yorkshire BS

national counties building society

  • Family Building Society
  • National Counties Building Society

national Savings and Investments (NS&I)

The NS&I is a state-owned bank and isn’t covered by the FSCS. Instead it is guaranteed by HM Treasury, meaning you are unlimited by how much of your money will be protected if it were to default.

Can’t find your bank or building society? Use the FSCS’s tool to check you’re protected.

single licence banks

As well as banking groups many banks also operate under their own licence.

Big supermarket banks – Tesco, Sainsbury’s, and M&S all have their own licences. (It’s worth noting that M&S is run by HSBC Group, but has a separate banking licence. This means if you have any of the HSBC accounts, it could limit things like new customer switching deals – but not affect your FSCS protection rights).

TSB, formerly part of Lloyds Banking Group, now have their own licence, among others. If you’re ever unsure whether your bank is part of a group or not then always check to make sure. You can do so with the bank themselves or on the FSCS website.

Credit unions

Credit unions have different FSCS rules

what is a credit union?

Traditionally, they are small, non-profit organisations that are set up by members within a community. Members usually have something in common, for instance living in the same town, or working in the same industry. Their purpose is to become a savings and loan provider to other members as an alternative to banks and building societies.

Members are mutually benefited by credit unions as there are no third-party shareholders taking profit. Offering an alternative, they are great use to those who can’t easily access ordinary bank products, for example, due to a low credit score. They are very beneficial in poorer communities where it may be trickier to get loans and credit from the bank.

It is worthwhile to consider credit unions as an option for your finances. Some offer competitive rates and you get the added benefit of being able to help out a community at the same time. You can find your credit union here.

borrowing from a credit union

As mentioned above, if a credit union is authorised by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA), then the FSCS rules state that they will guarantee up to £85,000 per individual. Even without this though, credit unions are generally very safe place for your money primarily because they are not for profit. Cash is only used to run the services and reward the members, not pay out to third parties.

Credit unions must adhere to certain rules, such as having a limit of reserve money and never lending above a certain percentage of their overall funds. They also tend to encourage savings and loan bundles: you’ll repay your loan, but some of that repayment each month goes into your own savings account. It takes longer to repay the loan, but means you’ll have savings at the end of it AND the credit union has stable funds.

Credit options are also much more willing to make small loans between £50 and £3,000 which most regular banks won’t. By having this option available it massively cuts back on the number of people getting stung by payday loans and helps prevent people from spiralling into debt. This is particularly true for some credit unions that offer immediate help and provide the cash the same day.

What’s Not Covered by the fscs Rules?

Unfortunately, not everything is covered by the FSCS. In fact, while there ways to protect yourself, many financial services and products don’t guarantee your money at all.


Everyone understands that with investment there is risk. When you invest your money you are immediately consenting to the simple fact that you might lose it. The only times the FSCS will get involved in regards to investment is when a UK-registered investment product provider goes bust, or there is a severe loss due to particular bad advice. The FSCS will cover up to £50,000 of investment in a firm that has gone into default. However, losing out on your initial investment due to poor performance on the stock market doesn’t count.

peer-to-peer lending

Peer-to-peer lending is a way for people to earn by lending money to individuals and businesses. The lender receives interest on the loan and by the end of the lending period the lender will have received their money back and made a profit on it. However, this can be an incredibly risk method of making money. There are no FSCS rules in place to protect any money lent through peer-to-peer lending. Therefore if something goes wrong you will lose all the cash you invested in it.

Although some P2P websites do have strategies and contingency plans in place to help pay out if a borrower defaults on their loan.

Before lending through a P2P lender you should always check the FCA register to make sure it’s regulated.

Some other smaller products, like pre-paid currency cards, are not covered by the FSCS, so it’s worth not keeping large sums of money on them. The eBay subsidiary, PayPal, is also not covered if it goes under.

more useful reading

If you want to read more about protecting your money and what other options there are then check out more articles here:

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3 years ago

An eye-opening and very informative article.

Jasmine Birtles

Your money-making expert. Financial journalist, TV and radio personality.

Jasmine Birtles

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