The bank of England has announced that millions of bank and building society savers in the UK will get £10,000 less compensation if their bank goes bust. 

The existing limit to the Financial Services Compensation Scheme (FSCS) is £85,000 per account but with new plans announced today this will be reduced to £75,000 on January 1st, 2016.

The compensation scheme is run under a European directive, which sets the limit at €100,000 across the whole of the European Union.

The precise sum in pounds for the next five years is set according to exchange rates on July 3 but the rate against the Euro changed where the price of the Euro has dropped against the pound. We are currently trading around €1.40, close to its highest level since 2007.

This is set to be a huge headache for savers with over £75,000 in a single account.

After the amount is set the level will not be reviewed again for a further five years. Read more about this story on the BBC website HERE.

“A large proportion of our clients have lost faith in government and banks and have already diverted a proportion of their wealth into physical gold and silver.  This latest statement from the Bank of England will make many people worry more about the safety of their unprotected wealth.  We would expect to see a rise in demand by those who have already woken up to the option of holding gold and silver as a precautionary measure.”  Caroline Peers of Bleyer Bullion

Sources: BBC News