Q&As about temporary high balances


1. What is classed as a temporary high balance?

Payments in connection with the following could be categorised as temporary high balances:

Sums paid to the depositor in respect of:

  • Real estate transactions (property purchase, sale proceeds, equity release) relating to a depositor's main or only residence
  • Benefits payable under an insurance policy
  • Personal injury compensation (unlimited amount)
  • Disability or incapacity (state benefits)
  • Claim for compensation for wrongful conviction
  • Claim for compensation for unfair dismissal
  • Redundancy (voluntary or compulsory)
  • Marriage or civil partnership
  • Divorce or dissolution of their civil partnership
  • Benefits payable on retirement
  • Benefits payable on death
  • A claim for compensation in respect of a person’s death
  • Inheritance 
  • Proceeds of a deceased’s estate held by their Personal Representative

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2. Is there a time limitation on holding proceeds that are categorised as a temporary high balance?

Deposits over £85,000 are protected up to six months from when the amount was first credited or from the moment a qualifying deposit became legally transferrable. Temporary means that the deposit must have been credited to the account (or become legally transferable if that is later) no more than six months before the firm goes into default.

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3. Is there a limit to the amount of compensation FSCS can pay for temporary high balance claims?

For most categories the limit is up to £1 million per depositor per life event, although we provide unlimited cover for personal injury claims.

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4. How do I know if my temporary high balance is protected?

The FSCS deals with claims against authorised firms (those regulated by the UK regulators, the FCA and PRA) that are unable, or likely to be unable, to pay claims against them. If you have a temporary high balance with an authorised deposit-taking firm that has failed you may be entitled to compensation. If you think you may have a temporary high balance claim please contact us for more information and to request an application form.

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5. How do I make a claim for a temporary high balance?

If you would like to make a temporary high balance claim please contact us for more information and to request an application form.

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6. Why is FSCS now covering temporary high balances when they didn’t previously?

The protection of temporary high balances is a requirement under the Deposit Guarantee Schemes Directive (DGSD). This standardises the protection of money held in banks, building societies and credit unions across the EU.

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7. What evidence of a temporary high balance do I need to provide to FSCS?

FSCS may ask for documentary evidence including (but not limited to) the following:

  • a property sale receipt or agreement;
  • a court judgement;
  • a will;
  • a letter from an insurer regarding an insurance payout;
  • a letter from a lawyer, conveyancer, mortgage provider, former employer, pension trustees;
  • court orders;
  • social security statements;
  • probate/letters of administration;
  • death/marriage certificate;
  • land register and HMRC records.

This list is not exhaustive and the evidence required will depend on the life event categorised your individual circumstances.

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8. Will FSCS automatically contact me if I am eligible for a temporary high balance claim?

No, FSCS will not automatically contact you. If you think you may be eligible to make a temporary high balance claim, please contact us for more information and to request an application form.  

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9. Usually compensation for deposits is paid within seven days. Within what timeframe will I receive my compensation payment for a temporary high balance?

Within three months from the firm’s date of default, provided FSCS is in receipt of all the supporting evidence.

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Jargon Buster

Deposits

money placed in a bank or similar institution to earn interest or for safe-keeping.

DGSD

Deposit Guarantee Schemes Directive

Eligible

qualifying for compensation under Scheme rules.

FCA

The Financial Conduct Authority is the UK's regulator for the financial services industry.