Prudential Regulation Authority propose to reset the deposit protection limit

As reported by the Bank of England on 21^st November 2016 the PRA have set out proposals to reset the deposit protection limit to £85,000, with effect from 30^th January 2017.

Any country in the EU but not using the euro is obliged to review its limit every five years, however, in extenuating circumstances it is allowed to make further changes. In this case, following Brexit and the fall in the pound.

The PRA proposes to:

• reset the deposit protection limit to protect depositors up to £85,000, as of 30^th January 2017;
• provide a five month transitional period for firms to implement the new deposit protection limit;
• require firms to notify the PRA if they are ready to implement the rule changes prior to 30^th June 2017; and
• update SS18/15 ‘Depositor and dormant account protection’ with the PRA’s expectations in relation to the above rule changes, correct references and delete expired test in the SS.

Until the proposals are finalised in a PRA policy statement, the deposit protection level remains at £75,000.