ONLY one in five people knows how much of their cash would be protected if their bank or building society went under, the savings safety net said on the anniversary the new limit was put in place.
A year after new rules increased compensation limits to £85,000, the Financial Services Compensation Scheme (FSCS) said that only 21% of people were able to give the correct figure in a study, while nearly half had no idea what it was.
The FSCS launched a £4m publicity campaign in a bid to raise the scheme’s profile, but later acknowledged that awareness had not been raised to the levels hoped.
However, the new percentage indicates that awareness has increased slightly, as just 17% of people knew the improved limit ahead of it coming into operation on December 31, 2010.
Mark Neale, chief executive of the FSCS, said: “The £85,000 limit is good news for every saver in the country, with 99% of accounts now covered.
“Although there have been no high profile failures over the last 12 months it is important for financial stability that savers are aware of the protection that is available to them.
“As only those financial institutions authorised by the FSA are covered by the FSCS guarantee it is vital that customers check their financial products are safe and remain within the limit.”
Mr Neale said that the industry had made significant progress in the information it provided to consumers about the FSCS, but “there is still much more to do“.
The survey of 998 people across the UK last month found that 45% of respondents said they did not know what the compensation limit for deposits and savings was.
As well as those who gave the correct figure, 9% thought it was up to £35,000, 16% believed it was up to £50,000, and 6% said it was up to £75,000, and 3% thought it was up to £100,000.
The FSCS, which recently celebrated its 10th birthday, has paid out around £26bn to 4.5 million consumers since it was set up a decade ago.
The rules governing compensation have changed several times since 2001, with the limit being £31,700 in the autumn of 2007 when the run on Northern Rock happened for example.
Earlier this month, the Financial Services Authority (FSA) announced plans to compel banks, building societies and credit unions to display notices in branches and on websites to raise awareness about compensation scheme limits.
Foreign banks with branches in the UK who are not covered by the scheme will have to state this as well as saying which other national scheme is providing protection. The scheme covers savings up to £85,000 for single accounts and £170,000 for joint accounts if a bank or building society goes bust.