Charities baffled by Financial Services Compensation Scheme

Charities Aid Foundation survey finds confusion ahead of next week's Treasury announcement on Icelandic losses

Only a quarter of charities know how much compensation they would receive if their banks failed, according to a survey by the Charities Aid Foundation.

CAF surveyed 280 charities and found that 35 per cent of respondents were unclear about how much of their funds were protected under the Financial Services Compensation Scheme.

A further 34 per cent said they were neither clear nor unclear. Only 25 per cent said they were clear about the level of protection given to charity funds by the FSCS.

John Low, chief executive of CAF, said: "Our research shows that most charities are unclear about where they stand with the FSCS.

"There is confusion about the classification of wholesale and retail depositors, with charities unsure as to whether they are eligible for compensation or, indeed, about the level of compensation offered."

The survey was carried out in advance of next week's announcement from the Treasury about whether charities will be fully compensated for money lost in the collapse of Icelandic banks.

Earlier this year the FSCS denied charities the chance to claim compensation.

CAF is involved in the campaign to reimburse these charities and gave evidence to the Treasury Select Committee when it compiled its report calling for the charities that have suffered losses to be compensated. The committee is awaiting a response from the Treasury, which is due on Friday next week.

"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 taken into account," said Low. "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."

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Latest Jobs

RSS Feed

Third Sector Insight

Sponsored webcasts, surveys and expert reports from Third Sector partners

Markel

Expert hub

Insurance advice from Markel

How bad can cyber crime really get: cyber fraud #1

Promotion from Markel

In the first of a series, we investigate the risks to charities from having flawed cyber security - and why we need to up our game...

Third Sector Logo

Get our bulletins. Read more articles. Join a growing community of Third Sector professionals

Register now