FSCS extends to small business savings

Date: 8th October 2008

The £50,000 which is now covered by the Financial Services Compensation Scheme (FSCS) also protects small businesses.

The scheme is usually considered as being a safeguard for only individual savers, but it also covers companies with fewer than 51 employees.

In a statement last week, the FSCS said that it was considering other methods in which it could further protect the interests of small firms.

A spokeswoman for the FSCS said: "The same levels of compensation apply whether the claimant is a private individual, small business, or a small company.

"For the purposes of deposit and investment claims, smaller companies are protected."

Under the current compensation regulations, small businesses are eligible for the scheme if they have a turnover of £6.5 million or less and a balance sheet of £3.25 million or less.

The amount covered by the FSCS was raised last week from £35,000 to the current £50,000.

Recent research revealed that about 80 per cent of small businesses were confident of beating the credit crunch.