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After seeing people lose their savings when Icesave went under I'm concerned that the same thing could happen to me. Who protects savings and how do I know whether my savings are protected?

After the catastrophic branch crashes of the noughties and ongoing global financial instability it's sensible to check whether, and to what extent, savings are protected.

How much is protected?

In the event of emergency, the Government will protect most UK savings accounts and ensure compensation of up to £85,000.

It does this through the Financial Services Compensation Scheme (FSCS), a fund set up by several financial bodies and regulated by the FSA to protect your finances in the face of a crisis.

It promises to repay any of your savings, although there may be a small delay while the compensation is being found.

The sum of £85,000, including any accumulated interest, will be repaid per person, per financial institution.

Joint accounts will be entitled to a total of £170,000 compensation for every institution, as the saved cash counts as half each.

Protected under FSCS?

Most savings account types and the vast majority of financial institutions fall under FSCS protection.

However, not everything is covered so it's always safest to check for exclusions.

Account types

Firstly, customers with current/savings accounts from bank and building societies or through credit unions will be protected to some extent by the scheme.

Guaranteed Equity Bonds - which count as deposit accounts because the interest is determined by the stock market's performance - will also be covered.

If you're worried about any cash stored in your pension savings, a Self Invested Personal Pension (Sipp) is another money store protected under FSCS.

However, you will need to check with your Sipp provider which bank your cash is held in to make sure this doesn't clash with any other bundle of savings.

Finally, any cash ISA account will be protected under the scheme.

So if your money is stored in any of these you're half way towards qualifying for FSCS protection.

Bank types

The next thing to check is whether your bank is regulated by the UK, as it has to be FSA regulated to qualify for this protection.

Most banks, even foreign-owned ones such as Santander, will be valid but there are a few EU banks that are regulated elsewhere.

These include, but are not limited to, ING Direct, Triodos and Anglo-Irish.

If you belong to one of these, your money will go under a 'passport scheme' and will rely on protection from the foreign government, not FSCS.

In addition, investors with peer-to-peer lending sites such as Zopa aren't always entitled to FSA protection. Check with the individual site or see our peer-to-peer lending risks guide for more information.

Multiple accounts and spreading cash

If you have more than one account here's where it gets tricky.

We've already noted, the FSCS covers £85,000 per financial institution, not per account.

This means that if you have a number of accounts with the same bank, you will only get £85,000 between them.

However, some banks under the same management will also count as the same financial institution.

For example, Halifax and the Bank of Scotland are sister banks so if you have an account in each they will also only be covered by £85k between them.

There are exceptions to this, though, the rules depend on the bank's licence and it can be complicated.

For this reason, it's always worth checking what financial institution all of your accounts fall under and if any of them coincide, especially if your bank or building society has recently bought out another company.

You can check the status of your bank and what institution it is on the FSA website .

Another way to fully guard your money is to spread it out.

Put your savings in several accounts over several financial institutions, all with no more than £83,000 on the balance sheet.

The extra £2,000 will leave room for any accumulated interest.

However, it's impractical to spread your money over more than say nine or ten accounts.

If you have a sum over £185,000, keep to less than ten accounts.

You may not be fully safeguarding your savings here, but at least you're significantly minimising the risk of losing the lot.

Alternatives to FSCS

The FSCS is a good scheme to focus on, as this really is the last course of action and is absolutely guaranteed.

But it will usually never even come to this.

When the banks crashed last decade the Government stepped in with alternative schemes to keep the institutions afloat.

The only exception to this was the Icesave case, which did reach the point of liquidation because it was technically an Icelandic bank.

Even here the Icelandic government paid back everyone's cash up to the £35,000 limit, as it was back then.

This doesn't always happen, though, so it's best to make sure you're fully covered by FSCS just in case.

If the FSCS scheme doesn't offer enough security for you, though, there are several other options.

100% safe accounts

Firstly, there are a number of accounts which guarantee to keep your savings 100% safe.

However, these usually have lower interest rates so many people try alternative methods.

Another super safe account to try is with fully state-backed National Savings and Investments .

This safeguards your money even more than a normal institution as you're guaranteed to get your money back unless the Government itself goes bust.

Debt repayment

There are a few other methods for keeping your cash safe.

Use savings to repay your debts, as interest on debt usually far exceeds interest on savings.

This way you'll be debt-free and won't have to worry about a large chunk of savings money.

A mortgage is a good debt to tackle too if you don't know where to put your savings, and you'll be saving yourself money by paying it back before it's due.