The UK Financial Services Authority has increased the limit of financial service compensation scheme cover for deposits to 100% of the first GBP35,000 of each depositor's claim.

The previous compensation limit prescribed by the Financial Services Authority (FSA) was a maximum of GBP31,700. This amounted to 100% of the first GBP2,000 and 90% of the next GBP33,000 of depositors’ eligible claims.

Clive Briault, managing director of retail markets at the FSA, said: At a time of market uncertainty it is important for consumers to know their deposits are properly protected. The action we have taken is designed to help reassure depositors with accounts up to GBP35,000 that they are 100% covered.

The government has indicated that it will propose further changes relating to financial services compensation arrangements in the UK designed to give consumers confidence that their savings and deposits are safe and secure.