Financial Services Compensation Scheme

Why you can bank on us
With the recent turmoil in global financial markets we understand that some customers may be worried about the safety of their money.

We have provided this information to reassure you about our position as Britain’s largest savings provider with over 100 years’ experience looking after our customers’ money.

Stability and certainty
Halifax is a division of Bank of Scotland, which is a subsidiary of HBOS plc.
HBOS and Lloyds TSB have joined together and are now part of a new group, Lloyds Banking Group.
 
The new group is well capitalised and financially strong.  This strength places us in an even better position to meet the challenges of the current financial climate and any future challenges we may face.

Our aim is to be the leading financial services organisation in the UK, using our strength and size to provide excellent customer service and create great value products for our customers.

Added peace of mind from the Financial Services Compensation Scheme
The Financial Services Compensation Scheme provides customers with extra peace of mind that their money is safe.

HBOS and Lloyds TSB savings continue to be covered separately under this scheme, as both organisations are covered by separate banking licences.  Should there be any changes to our banking licences in future, we will contact you to tell you about them in the usual way.

Some more detailed Questions & Answers on the compensation scheme are outlined below:

What is the Financial Services Compensation Scheme?
The Financial Services Compensation Scheme (FSCS) can pay compensation to consumers in the event that an authorised financial services firm is unable to pay back customers' money and generally cannot meet claims made by customers against it.
The FSCS is an independent body set up under the Financial Services & Markets Act 2000. The scheme applies to different products in different ways.

How much of my money in my Halifax accounts would be protected by the FSCS?
You can currently claim up to £50,000 in compensation for your money held in savings and current accounts. If your money is in a joint account, each of you can claim up to £50,000.
That means that if there are two of you on the account you are jointly protected for up to £100,000 compensation. The FSCS assumes that the money is owned equally between the account holders (unless evidence shows otherwise).

Is my child’s Halifax account in a Trustee’s name covered?
Yes. Where a trustee holds an account in trust for another person, like a child, then the trustee will have a claim against the scheme for the trust. That claim will be treated separately to any claim the trustee makes for any accounts in their own name.

What about my money in accounts in other HBOS and Lloyds TSB divisions?
Under the Financial Services Compensation Scheme you are covered separately for the deposits you have with each separately licensed bank.

HBOS and Lloyds TSB savings continue to be covered separately under this scheme, as both organisations are covered by different banking licences.  Should there be any changes to our banking licences in future, we will contact you to tell you about them in the usual way.

Money held in current or savings accounts with us is covered by the Bank of Scotland banking licence.

£50,000 (£100,000 for joint accounts) is the maximum compensation you could get for all of your money held in bank accounts or savings accounts with Bank of Scotland plc. These include accounts held in the following trading names and divisions:

Halifax
Bank of Scotland
Birmingham Midshires
Intelligent Finance
St James's Place Bank
St James's Place Private Bank
AA
Saga

Lloyds TSB has three core licensed banks operating on the high street,
Lloyds TSB Bank, Lloyds TSB Private Banking and Lloyds TSB Scotland, plus
two further licences for subsidiaries, Agricultural Mortgage Corporation Bank
and Scottish Widows Bank.

Are my investment products protected by the FSCS?
As well as protection for bank accounts and savings the scheme also provides protection in the event an FSA authorised company cannot meet claims made against it in relation to investment and long-term insurance products.

The actual level of compensation a client would receive will depend on the basis of their claim.  The Financial Services Compensation Scheme will consider each claim individually at the time it is made. FSCS can only pay compensation for financial loss and there are limits to the amounts of compensation the FSCS can pay.  Maximum FSCS compensation limits are per person (per provider firm and per category of claim):

Investments category – Open-Ended Investment Company (OEIC)
The limit for investment business is £48,000 per person (100% of the first £30,000 and 90% of the next £20,000) for business conducted on or after 28th August 1988.  This includes products such as OEICs – Stocks and shares ISAs, Collective Investment Plan (CIP) and Child Trust Fund (CTF).

Long-term insurance category
•   The limit for Long-term insurance (e.g. pensions and life assurance) is as follows: 100% of the first £2,000 of a claim is covered in full, plus 90% of the remainder of the claim.
•   There is no upper limit to the amount that may be claimed. Personal Investment Plan, Guaranteed Investment Plan, Guaranteed Growth Bond, Investment Bond and Halifax Bonus Bond, Stakeholder Pension, Flexible Protection Plan all fall under the long-term insurance category as they are life assurance products and not classed as Investments under the scheme rules.

For Investment and Long-term insurances claims, customers would be covered per person, per separately authorised institution so you can make multiple claims – one per product category per each FSA authorised institution which is a member of the scheme.   The separately authorised institutions within Lloyds Banking Group are: Halifax Life Limited, St Andrew's Life Assurance plc, Clerical Medical Investment Group Limited, HBOS Investment Fund Managers Limited, Clerical Medical Investment Fund Managers Ltd, Scottish Widows plc, Scottish Widows Unit Trust Managers, Scottish Widows Bank and Scottish Widows Investment Partnership.

What happens if I have borrowed money from Halifax?
Any money you owe (e.g. on your mortgage, loan or credit card) may be taken into consideration before any compensation is paid. If this happens, you will no longer owe the money deducted from your compensation.

Here’s an example:
Jack has a £10,000 home loan. He also has £40,000 in his savings/bank account.
The money Jack owes may be taken into account in working out how much compensation he should receive, and so he could receive £30,000 in compensation, and will no longer owe the £10,000.

Where can I find out more about the Financial Services Compensation Scheme?
If you have any questions about the FSCS (in particular, on requirements for compensation) more information can be found on the FSCS website www.fscs.org.uk

Additional Needs
We are committed to meeting the needs of all our customers. If you have a hearing or speech impairment contact us using Textphone 0845 732 3436 (lines open 9am – 5.30pm, 7 days a week). For visually impaired customers, we can provide documents in large print, Braille or on audio cassette. Please speak to a member of staff.

Customer Complaints
We aim to please – but we know that sometimes things go wrong. If you have a problem or complaint we want to know. In most cases this can be dealt with at your branch.

If your complaint is not resolved to your satisfaction, then ring our Customer Complaints Helpline on 0845 7253 519. A copy of our complaints procedure is available on request.
Complaints we cannot settle may be referred to the Financial Ombudsman Service.

* Halifax is Britain's largest savings provider - source: GfK FRS 6 months ending 06/08.  Based on all respondents with savings accounts excluding Premium Bonds.