The Treasury Minister has confirmed a review of the island’s Depositor Compensation Scheme, including its protection limit, which currently stands at £50,000 per depositor per bank.
This follows the Bank of England’s November 2025 announcement to increase the UK’s protection to £120,000.
Minister Chris Thomas stated the review aims to ensure the scheme’s effectiveness and alignment with evolving international standards.
He told Tynwald that the Financial Services Authority will be conducting a review of the existing legislation, while noting the need to maintain parity with the Channel Islands due to similarities between the banking sectors.
A full consultation is planned for the first half of 2027, with new regulations expected in winter 2027/28.
Financial Centre
MHK Jason Moorhouse raised concerns that the lower limit could impact the island’s financial centre, asking if the disparity with the UK had been assessed.
Mr Thomas acknowledged the point, confirming the limit has “always been lower than it has been in the United Kingdom since 2010” and that the issue is under review with the banking sector.
Mr Moorhouse also highlighted the reduction in licensed banks on the island, from 34 in 2010 to just nine today, which significantly reduces the maximum total protection available to depositors.
Lib Vannin leader Lawrie Hooper questioned why the Treasury seemed to prioritise alignment with the Channel Islands over local opinion, referencing a 2024 consultation where respondents favoured raising the limit to match the UK’s previous £85,000 level.
Mr Thomas defended the careful approach, saying “the weight of the people we represent is absolutely most important,” but added that “these things do need to be done carefully” to avoid creating a “competitive version” with neighbouring jurisdictions and to maintain good relationships with banks.