Financial Portfolio - Know Your LimitsIn the past the financial stability of banks, insurance companies and investment houses was probably not given the prominence it deserved by investors when deciding on a home for their money.  Surely if you stuck with the large, well-known companies your money would be safe.

In 2008 this became a lesson sorely learned and hardly a week went by without the likes of Lehman Brothers, RBS and Northern Rock hitting the headlines.

Financial Services Compensation Scheme (FSCS)

Suddenly, investor protection was the priority and everyone became aware of the Financial Services Compensation Scheme (FSCS) and what protection it gave them.  At the time deposit investments with any institution were protected up to £50,000 per saver and hence forwarded anyone with substantial sums on deposits limited their exposure to this amount, even if it meant that they didn’t get the best rates of interest on all of their savings.

These limits have since increased to £85,000 but there is a widely held misconception that they apply to all investments, whether they are in deposit accounts, mutual funds or life assurance and pension funds.  Before you decide on which tax wrapper you are going to use make sure that you are fully aware of what protection you have.