Under new rules those saving cash in the UK will only receive protection on £75,000 of their savings, £10,000 less than at present.

Those with large amount of cash in banks – such as those saving for a mortgage deposit – should consider their options.

The Financial Services Compensation Scheme (FSCS)  runs the compensation fund which guarantees the return of cash if a financial institution goes bust.

It is monitored by both the Financial Conduct Authority and Prudential Regulation Authority and covers deposits, insurance and home finance loans.

The amount of cover is calculated based on a European-wide scheme, equivalent to €100,000. With the pound performing strongly against the euro, this value has dropped by £10,000.

The new rules come into force at the end of the year.

This has repercussions for people saving a deposit for a mortgage. If your savings are more than £75,000 then you may wish to consider moving some of your cash to a separate institution as the £75,000 limit applies to each financial institution.

The Financial Services Compensation Scheme said 95% of people would be unaffected by the changes to the scheme.

“The current £85,000 level of protection continues until 31 December 2015,” a statement from the FSCS said.

“So there’s no immediate change for consumers. That means people with more than the new limit have six months to spread their money around to keep within it.

“The new limit will be £75,000, which will protect more than 95% of all savers. The overwhelming majority of people have £50,000 or less in savings.”