FSA to force banks to display compensation limits for savers

The Financial Services Authority (FSA) has unveiled plans that would make it mandatory for all banks and building societies in Britain to display information about what would happen to customers' money if they failed.

Every branch and website would have to detail how much compensation savers could claim, as well as how they would go about getting hold of it.

It is part of a scheme designed to improve consumer confidence in financial services providers and boost knowledge about deposit protection.

Under the proposals, branches and websites would display the message: "Your deposits are protected up to £85,000 by the Financial Services Compensation Scheme, the UK deposit protection scheme. Any deposits you hold above this amount are not covered."

Any banks that are headquartered in Europe would need to tell customers their deposits "are not protected by the UK Financial Services Compensation Scheme".

FSA chief executive Hector Sants said: "It is vitally important that customers have confidence in the banking system and that is why we are taking this step.

"Consumers must understand how their money is protected and be clear about the limits ... to make informed decisions about how much money to deposit with one bank."

Back in October, chief executive of the Financial Services Compensation Scheme Mark Neale told BBC News that a £4 million campaign designed to raise public awareness about an increase in the safety limit from £50,000 to £85,000 had failed.

He said it had "shown very little change in how much people knew of the safety net before and after".

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