Unless you have been on holiday, hopefully enjoying some sun, you will have heard of Lehman Brothers, Merrill Lynch, AIG, and HBoS and their acute demise. Rumours are also abound for others and it could be that by the time you read this they will have joined them. Without going into the detail, the situation has largely arisen due to poor lending practices and a frenzied cultural acceptance to taking on debt.
 
However, there are successful business people out there bucking the national trend and accumulating cash instead of leveraging debt and we have already had enquiries early on in this week from people concerned what to do with their savings. And it may seem a daft question but should you be concerned?
 
The truth is we don't know.
 
What we can say however is that the Financial Services Compensation Scheme will cover you under certain conditions. If we focus on pure cash investments, it is the first £35,000 that is safe. So if you have, say, £25,000 in your HSBC Deposit Account and £20,000 working capital in your HSBC Business Current Account, only £35,000 of the total is covered. But be aware the £35,000 limit doesn't necessarily just extend within a bank but is restricted per institution, so if a Group of companies are covered by one Financial Services Authorisation it is only the first £35,000 of savings held within the range.
 
Further to this, good tax planning may have seen you incorporate recently to form a distinctly separate formal Limited Company so we also wanted to establish whether deposits held within a company bank account would be covered. Thankfully, in short, they are. The same limits and criteria apply (£35,000) but if you operate a 'Small Company' as defined by the Companies Act, all is good. (A small company has less than £6.5m turnover; less than £3.26m of assets; and less than 50 employees).
 
If you feel you may be caught by these limits then there are a couple of tactics you can employ.
1) At its simplest you can shift money between your own bank accounts. Obviously you may need to open new ones to ensure they are with different institutions, and this may take a little time, but if you are at all concerned then it is a relative easy solution to protect your hard-earned cash;
2) Another possibility would be to ensure your savings are spread across individuals in your family. In particular your limits are doubled if you have a joint account (i.e. you get £70,000) as it is per investor.
 
It fair to say that specifics will vary from case to case and differing compensation is available for insurance policies and other non-cash investments but take professional advice if you need to.