WIREDGOV

Following the Chancellor’s announcement that Northern Rock is being sold to Virgin Money, the Financial Services Compensation Scheme is issuing guidance to those savers who currently have money with both institutions.

From 1 January 2012, when the sale goes through, both organisations will maintain separate banking licences. This means that savers who have money with both banks will be covered up to the existing compensation limits for each.

Mark Neale, Chief Executive of the FSCS, said: "The FSCS protects money in banks, building societies and credit unions authorised by the Financial Services Authority. Those people who have money with both Northern Rock and Virgin Money can be reassured that the two brands will operate under different banking licences.

“Those with large amounts of cash should remember to always try to keep within the £85,000 FSCS deposit limit, or £170,000 for joint accounts, per banking licence to protect their money. Anyone with savings above those limits should consider spreading their money around to ensure it is safe."

The FSCS has helped more than 4m people and paid more than £23bn in compensation since 2001. It was set up by Government, is independent and free to consumers. Financial services firms fund the compensation scheme.