Compensation level cut for savers with Virgin Money, Clydesdale Bank, and Yorkshire Bank accounts

Consolidation within the banking sector means that savers should check the level of cover that they have.

Savers who have accounts with Virgin Money, Clydesdale Bank, Yorkshire Bank and their offshoot B have seen a change in the level of compensation they could receive in the unlikely event of the group running into trouble. 

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Virgin Money, which became part of the Clydesdale and Yorkshire Banking Group (CYBG) last year, transferred its savers to Clydesdale Bank in October. Its savers now have one lot of cover under the Financial Services Compensation Scheme (FSCS).

Under the scheme, savers are guaranteed to get the first £85,000 - £170,000 on joint accounts - of their savings back if their bank collapses. The money is typically repaid within seven days.

The level of cover applies to each banking licence registered with the city regulator. Before the switch, CYBG had its own licence and so did Virgin Money. This meant that savers had £85,000 worth of cover with each bank. But now the group has moved to just one licence, cover has fallen to £85,000 over all accounts held with the group. 

Savers who find themselves over the new single £85,000 limit have until 21 January next year to move some of their money out without penalty.

In a further buy-out, Charter Savings Bank became part of One Savings Bank in October, which also runs Kent Reliance as a brand. However, customers saving with Kent Reliance and Charter Savings will benefit from the £85,000 limit with both banks because they have retained two separate banking licences for the foreseeable future. 

Saga paired up with Goldman Sachs International to offer new savings accounts in September. Here, savers have one lot of £85,000 cover on their deposits with Goldman Sachs International Bank, including savings with both the Marcus and the Saga brands.   

If you have money in old Saga accounts opened before 28 September this year, your money is still with Birmingham Midshires and covered under the FSCS by the Bank of Scotland licence.

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