Rhianna Benson
From 1 December, couples with anything between 1p and £240,000 in a UK joint bank account will receive extra protection if their financial provider suddenly goes bust, as per a new law.
Previously, legislation stated that, if a bank, a building society, or a credit union went into liquidation, their customers were guaranteed to have as much as £85,000 of their savings protected each.
This cover had been in place since 2018, with the figure having been decided by the Financial Services Compensation Scheme (FSCS).
For those with any less than £85,000 in their account, the ruling didn't make the biggest difference, because anything up to this figure was already protected. It was individuals with much more than this amount in their banks that were suffering a risk.
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If their payment provider went out of biz, they'd only get £85,000 back - even if they'd saved up a much higher amount.
As we say, however, a new law set to be put into place in the coming weeks will see this protected figure sky-rocket by £35,000, to an impressive £120,000 per customer.
The Prudential Regulation Authority (PRA) confirmed earlier this week that the amendment had been made in line with nationwide inflation.
"This change will help maintain the public’s confidence in the safety of their money," Sam Woods, who works as deputy governor for prudential regulation at the Bank of England, told the BBC.
"It means that depositors will be protected up to £120,000 should their bank, building society or credit union fail. Public confidence supports the strength of our financial system."
It's worth emphasising again, this newly covered figure applies per person.
If you're sitting there panicking, therefore - with the majority of your savings sitting in a joint account shared between yourself and other person - you needn't worry.
The new law also covers couples for the same amount per person during events like financial crashes.
So, if you're married, or splitting your bills with your flatmate though one single account, each person will receive £120,000 in protection. This means £240,000 of financial cover per twosome.
In cases where a person has an individual account and a joint account with the same bank, however, they're still only covered for one lot of £120,000 - they won't get £240,000 just for having two accounts.
So, to insure extra safety if you're someone with much more than £120,000 in your individual account, or more than £240,000 in your joint account, it might be worth spreading your cash.
Avoiding doing this between banks that are part of the same group, however - like First Direct and HSBC, which are actually under the same umbrella.