FSCS leaves charities unclear about protection of banked deposits

A survey of 280 charities by the Charities Aid Foundation (CAF) reveals that only a quarter (25%) are certain they know how much of their funds are protected under the Financial Services Compensation Scheme (FSCS) should their bank fail.

Over a third (35%) of charities find the scheme is unclear about the level of protection given to charity funds. A further third (34%) of respondents neither agreed, nor disagreed that they were clear about the level of protection - suggesting that they are also uncertain. Only 32% were clear.

The results come as charities await the response from HM Treasury to the Treasury Select Committee's report on the collapse of the Icelandic Banks. CAF's Chief Executive John Low gave evidence to the committee and called for a separate depositor class for charities. This call was endorsed in the Select Committee's final report which also called for charities who lost funds in the collapse of the Icelandic banks to be fully compensated.

Commenting on these findings, John Low said, "Our research shows that most charities are unclear on where they stand with the FSCS. There is confusion around the classification of wholesale and retail depositors, with charities unsure as to whether they are eligible for compensation or indeed the levels of compensation offered.

"Last summer we called for a separate depositor class for charities in order to ensure that the distinct nature of charitable funds raised and held for public good is fully taken into account. The banking crisis has caused great concern for charities, and many of those who lost funds in the collapse of Icelandic banks have had to scale back their services."