BoE proposes raising deposit insurance limit
Central bank suggests increasing level of savings protection to account for inflation since 2017
The Bank of England has proposed raising the deposit insurance limit to ensure the level of protection is not eroded by inflation.
In a consultation paper published today (March 31), the BoE’s Prudential Regulation Authority (PRA) said it was proposing to increase the limit to £110,000 ($142,319) from £85,000.
The PRA said the proposal aimed to address the consumer price inflation that had occurred since 2017, when it increased the deposit insurance limit from £75,000 to £85,000. It added that raising the limit again would “help maintain consumer confidence by ensuring that the limit has not been eroded in real terms”.
It said the changes, if implemented, would come into effect in December. It added that it would review the limit again in five years.
The hike would place the UK’s deposit insurance level in between that of the European Union and the US. The European Commission guarantees deposits up to €100,000 ($108,033) for lenders in the European banking union, while the Federal Deposit Insurance Corporation protects savings of up to $250,000 for US banks.
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