What is ring fencing?
Following the financial crisis which began in 2007, the UK Government has put new rules in place to protect the economy and taxpayers. This change separates the services you would get in a branch or online from the investment banking and global operations of the giant banks.
Each of the larger UK banks must separate retail banking activity from the rest of its business; helping to reduce the risk to normal banking customers in the event of a failure in another part of the business. For those larger banks, this means a restructure to their organisations, and these changes must be implemented before the 1 January 2019.
What does this mean for Aldermore customers?
The new ring fencing legislation will apply to larger banks in the UK with deposits of £25bn or more. Though Aldermore isn't impacted, if you have accounts with other banks in the UK, you may receive communications about this change from them.
Your bank will let you know if the changes will affect you and your account. For example, your bank’s sort code may change and/or you may be issued with a new bank account number. If you are affected, your bank will let you know when the change is due to take place, what to expect and if there is anything you need to do.
It's expected that payments to old account numbers and sort codes will be redirected for a period of time, and that direct debits and standing orders will be transferred automatically, but you should check these details with your bank.
Each of the larger banks may implement ring fencing in different ways and at different times before 1 January 2019, so you may get different information from them.