The FSA says the new deposit compensation limit for the United Kingdom will rise from £50,000 to £85,000 per person, per authorised firm, from 31 December 2010.
This is the Sterling equivalent of the &euro100,000 deposit compensation limit which comes into force in all European Economic Area (EEA) member states at the end of the year.
Other changes include fast payout rules, with a target of a seven day payout for the majority of claimants and the remainder within the required 20 days.
Gross payout, which protects customers by ring fencing their deposits if they have savings and loans with the same firm, will also come into force at the end of the year. Currently, any outstanding loan or debt would be deducted from any compensation.
This new pan European requirement replaces the existing UK arrangement which has been in place since 2009, and which allowed for separate compensation cover for customers with deposits in two merging building societies.
Sheila Nicoll, director of conduct policy at the FSA said: “The need to maintain customer confidence in the banking system is one of the key lessons from the financial crisis.
