Financial Services Compensation Scheme (FSCS)

Important Information about compensation arrangements

We are covered by the Financial Services Compensation Scheme (FSCS). The FSCS can pay compensation to depositors if a bank is unable to meet its financial obligations. Most depositors - including most individuals and small businesses - are covered by the scheme.

In respect of deposits, an eligible depositor is entitled to claim up to £85,000. For joint accounts each account holder is treated as having a claim in respect of their share so, for a joint account held by two eligible depositors, the maximum amount that could be claimed would be £85,000 each (making a total of £170,000). The £85,000 limit relates to the combined amount in all the eligible depositor's accounts with the bank, including their share of any joint account, and not to each separate account.

For further information about the compensation provided by the FSCS (including the amounts covered and eligibility to claim) please ask at your local branch, refer to the FSCS website www.FSCS.org.uk or call the FSCS on 0800 678 1100. Please note only compensation related queries should be directed to the FSCS.

Clydesdale Bank and Yorkshire Bank are trading names of Clydesdale Bank PLC. As both banks are part of the one and same authorised entity the £85,000 limit applies to all eligible deposits held across both brands.

How much compensation would I receive from the FSCS?

Each individual person can claim up to £85,000 in compensation for deposits held in savings and current accounts. If these are held in a joint account, each party can claim up to £85,000.

This means that if there are two parties on an account they are jointly protected for up to £170,000 compensation. The FSCS assumes that the money is owned equally between the parties on the account.

I have a number of accounts with the Bank and how are these treated for compensation?

For the purposes of the FSCS all your balances are combined to calculate the compensation and are not treated individually.

What if I have borrowed money from Yorkshire Bank?

Compensation will be paid based on the amounts held in your accounts regardless of the amounts owed (for example, overdrafts, loans, mortgage or credit card debts).

An example is below:

You have a £10,000 loan and have £40,000 in savings/bank accounts. The loan will not be taken into account in working out how much compensation would be received, and you would receive £40,000 in compensation. The £10,000 loan owed to the Bank would be collected by the liquidator.

The only exception is for Current Account Mortgages, where your current account is combined with your mortgage account and operates as a single overdraft.

Are Charities & Club and Society accounts covered under FSCS Rules?

These are covered by the scheme, and are treated the same as businesses. Eligibility is determined by its structure and legal status. Unincorporated charities, clubs or societies must have not more than £1.4 Million in net assets to be eligible under the scheme.

I bank with Yorkshire and also have accounts with Clydesdale Bank and are these treated separately?

No, as Yorkshire and Clydesdale Bank are covered by the same banking licence the balances are combined for the purposes of the FSCS compensation. The same applies if you bank with Clydesdale and also have a Yorkshire Bank account.

Does this impact Sole Traders?

Sole traders are eligible under the scheme, however, their compensation level is the combined total of their personal and business deposits.

How are partnerships treated?

Partnerships are eligible as depositors under the compensation scheme and the compensation is paid to the partnership. Limited Liability Partnerships are subject to the same eligibility rules as a 'small company'.

What Businesses are covered by the FSCS?

The FSCS is focused on protecting personal customers and small businesses up to a certain size.

The size threshold for Limited companies is defined in the Companies Act 2006 and a business is a "small company" if it meets two of the following three criteria:

1. Gross turnover not more than £6.5 Million
2. Gross balance sheet total of not more than £3.26 million and
3. Not more than 50 employees

Unincorporated associations (Mutual Associations) must have not more than £1.4 Million in net assets to be eligible under the scheme.

Does the FSCS provide protection for insurance and investment products?

Yes, most retail customers (this includes private & small business customers) are eligible under the scheme.

For further information on the conditions governing compensation and details on how to apply please refer to the FSCS.

Where can I find more information on the Scheme?

The rules regarding the scheme are very detailed and further information is available from:

Financial Services Compensation Scheme
7th Floor, Lloyds Chambers
1 Portsoken Street
London
E1 8BN

Helpline 0207 741 4100 or 0800 678 1100.

Website www.fscs.org.uk