The Financial Services Compensation Scheme (FSCS) is to pay out £100,000 to around 400 savers after a Kent-based credit union collapsed.
Wantsum Credit Union stopped trading on Monday, prompting the FSCS to promise it will compensate most of the 400 savers within seven days.
The FSCS protects up to £85,000 of savings or £170,000 for joint accounts. Since 2001 it has paid out more than £26bn in to 4.5m people.
The industry-funded service last month announced it plans to raise £313m from the financial services industry in the coming year to cover the costs of compensation, up from £311m in 2013/14.
The scheme plans to hit investment advisers with a £105m levy, an increase of 34% on the last levy, while those advising on life and pensions will face £40m for the coming period, up from £13m last year.
Investment advisers were also presented with a £30m top-up levy for the current year after the FSCS struggled to find funds to cover the the cost of the Catalyst Investment group failure, which was declared in default in October.
Advisers meanwhile said they have 'given up' complaining about the sporadic levy increases. Association of Professional Financial Advisers (APFA) director general Chris Hannant explained that advisers valued the reassurance provided by the compensation scheme and felt somewhat helpless because the levy amount was determined by external events.
But he called for a top-to-bottom reform which ensured advisers were not paying for the failures of so-called 'wholesale intermediaries'.
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