ISA savers who have set aside the maximum cash since the savings scheme started now have £48,511 in their accounts.
The amount splits down as £39,300 cash saved plus £9,454 in interest since April 1999.
Many savers are concerned that they could lose their money if their ISA provider goes bust,
but an increase in compensation limits from the government-backed Financial Services
Compensation Scheme (FSCS) to £85,000 shows all the money in cash ISAS is protected.
One in 10 savers is holding back from opening a cash ISA because they believe they could
lose their savings and more than two thirds (38%) admit they did not know about the
compensation scheme, says a poll by FSCS.
The FSCS is a free service that pays compensation if a bank, building society or authorised
deposit holder is unable, or likely to be unable, to pay claims.
The maximum levels of compensation are:
Cash deposits: £85,000 per person per firm
Investments: £50,000 per person per firm
Mortgages and secured loans: £50,000 per person per firm
Insurance: 90% of the claim with no upper limit. Compulsory insurance is protected in
full.
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Mark Neale, Chief Executive of the FSCS, said: “The FSCS protects people who are customers of
UK-authorised financial services firms.
“It’s concerning that less than half of all adults are aware that ISAs savers are protected if
their provider goes bust. Despite low interest rates, ISAs are extremely popular products and
it is important that people know their money is safe as long as it is held with an institution
which is authorised by the FSA. The FSCS was set up by government to protect consumers, is
independent and funded by the industry.
“These findings show the importance of our awareness campaign and highlight how much
work everyone in the financial services sector has to do to educate consumers about the
protection the industry-funded FSCS provides.”
