Great news for savers: Nationwide welcomes FSCS extension

Nationwide director, Maxine Taylor comments on today's announcement by the FSA confirming that customers of merged building societies will retain their FSCS (Financial Services Compensation Scheme) cover until 30 December 2010 and the timescales outlined for FSCS levy reform.

"We're delighted to see the FSA has committed to provide customers of merged building societies with clarity over the FSCS protection they have. We are pleased our customers who held accounts with Cheshire, Derbyshire or Dunfermline before they joined the Nationwide Group, have separate cover up to £50,000 with each of the four organisations until 30 December 2010*. This means that eligible customers with accounts in all societies will have up to £200,000 of savings fully protected by the compensation scheme or £400,000 fully protected for those holding joint accounts.

"However, we are disappointed with the timescales outlined for reform of the calculation of levies. The current system is inequitable as the FSCS charge is not linked to the level of risk posed to the financial system by individual institutions, be they a bank or a building society, but is instead allocated by share of the retail savings market. We're pleased the FSA has committed to review the funding model but we are disappointed with the timescales outlined as we believe the review requires greater urgency. The events of the past 18 months could never have been predicted and now the timing is right to reform the scheme to help increase consumer and stakeholder confidence."