Via FSCS, if a bank or building society fails and cannot pay back a person's money, the customer can get automatic compensation. This is if the firm failed after January 1, 2017.
There are some rules when it comes to what is protected though.
For instance, the bank or building society needs to be authorised by the Prudential Regulation Authority (PRA).
Furthermore, where a person holds their money can impact how much compensation a person is entitled to.
FSCS explains: "If you have money in multiple accounts with banks that are part of the same banking group (and share a banking licence) we have to treat them as one bank.
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"This means that our compensation limit applies to the total amount you hold across all these accounts, not to each separate account.
"For our compensation limit to apply to each individual account, you’d need to hold money with different banks that don’t share a licence."
As such, it may be savers want to check whether their savings are protected.
FSCS has an online tool which can be used to check this.
They also need to state the amount of money saved with that bank, building society or credit union.
The final requirement is to state whether this is held in a personal or sole trader account, a joint account, or via a charity or limited company.
The tool then states how much of the money held with each bank, building society or credit union is protected.
It also states how much, if any, of the savings are "at risk".
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