‘Is my inheritance safe if my building society goes bankrupt?’

I will inherit some money soon and plan to put it in my savings account with Kent Reliance.

The amount I currently own is within the Financial Services Compensation Scheme (FSCS) limit of £85,000, so I should be protected if Kent Reliance were to go bust.

But what if my inheritance pushes me over the edge?

C. Milton of London

• Get expert help with your money problems

‘Your money is safe, at least for six months’

Joanne Padilla, Which? Money expert, says…

To summarize, the Financial Services Compensation Scheme will step in if banks and building societiesinsurers and some investment providers go bankrupt.

You are correct in saying that the normal deposit protection limit offered by the FSCS is £85,000 per individual, per financial institution (some banks share protection).

However, under certain circumstances there is an additional limit for temporarily high balances – for example proceeds from the sale of your home, an inheritance or an insurance payment.

This extends the limit to £1 million for six months, and is separate from the original limit of £85,000.

Make a note of when your six months expire and transfer the money elsewhere.

If you don’t need it soon, you can put it in there fixed interest savings accounts to get a better interest rate.

Be warned that keeping large amounts of money in savings accounts in the long term carries the risk of your money growing slower than inflation, while taxed on the interestif it is not in a is cash.

Depending on how much you inherited and your financial situation, you may want to use the money for this purpose pay off debts (whose interest payments may outweigh savings), invest it for a higher return or possibly contribute to your pension benefit from tax relief.

• More information: Best savings account

Which one? Money 1-on-1 guidance

Our team of money experts can answer your big and small questions, on topics ranging from pensions to taxes and from savings to scams.

They are impartial, so they don’t care regulated financial advice or recommend certain products or providers – they are there to support you and help you make more confident financial decisions in these areas and more:

Which one? Money members and their immediate family receive unlimited access to 1-on-1 counseling sessions.

If you have a Which? Money member, that’s possible book an appointment online.