In June, a small bank called Southsea Mortgage and Investment Company was placed in administration by the Financial Services Authority (FSA)? It was the first such failure of a deposit-taking institution since the problems encountered by Dunfermline Building Society in 2009.
The Financial Services Compensation Scheme’s new faster compensation payments system kicked in and the ‘vast majority’ of Southsea’s depositors received compensation the day after the FSA acted. On this occasion compensation was not unlimited – the new £85,000 ceiling introduced in December 2010 was applied. That change of approach is worth noting if you have large deposits with any one bank or building society.