FSCS compensation limits for savings, investments, insurance and more

The Financial Services Compensation Scheme (FSCS) is the UK's statutory compensation scheme of last resort. It pays you money back when a financial firm that owes it to you has failed and cannot pay it itself¹. How much it pays depends entirely on what kind of product the failed firm held or sold: the deposit limit is £120,000 per person, per authorised firm, while investments and most advice claims are capped at £85,000, and insurance claims are paid at 90% or 100% with no upper limit².

The headline change happened on 1 December 2025, when the deposit protection limit rose from £85,000 to £120,000². That rise applies to firms that fail from that date onwards, and it covers money in current accounts, savings accounts, cash ISAs and savings bonds at banks, building societies and credit unions authorised by the Prudential Regulation Authority (PRA)⁴. The investment limit was not raised: it still stands at £85,000 per person, per firm⁵.

FSCS limits at a glance: £120,000 for deposits, £85,000 for investments

The FSCS protects several different categories of financial business, and each has its own limit and its own way of calculating compensation. The two figures most people arrive asking about are the deposit limit, £120,000, and the investment limit, £85,000².

Two things shape every one of these limits. First, they apply per person, not per account: the FSCS adds up everything you hold with a failed firm and pays one limit against the total¹⁰. Second, they apply per authorised firm, which is not the same as per brand: several well-known high street brands can sit under one banking licence and share a single limit between them¹¹. Both points are covered in detail below, because they are where most people's assumptions about protection go wrong.

The scheme is free to consumers and funded by levies on the financial services industry, not by the government¹. More background on how the scheme works is in the FSCS explained.

Savings and current accounts: up to £120,000 per person, per firm

Money held in current accounts, savings accounts, cash ISAs and savings bonds at a UK-authorised bank, building society or credit union is protected up to £120,000 per eligible person, per authorised firm². The provider must be authorised by the PRA, and the FSCS can only protect money held by UK branches of authorised firms⁴.

The limit applies to the total across everything you hold with that firm, not to each account separately. If you have a current account, an easy access savings account and a cash ISA with the same bank, the three balances are added together and the £120,000 limit covers the combined total¹⁰. Opening a second or third account with the same bank creates no additional protection. MoneyHelper puts the same point plainly: you get up to £120,000 for each banking group, building society or credit union you have accounts with, and no more¹².

Deposits are protected from the first pound, so there is no excess or deductible: the FSCS states it now protects eligible deposits from the first pound up to £120,000 per person, per authorised firm⁶. Any amount above £120,000 with a single firm is not covered by the FSCS if that firm fails, though you would still rank as a creditor of the failed firm for the balance.

One provider sits outside these limits altogether. National Savings & Investments (NS&I) is backed by the Treasury rather than the FSCS, and money in NS&I accounts is 100% protected, regardless of FSCS limits, up to the maximum you can save in those accounts¹³. For someone with deposits above £120,000 who wants them fully protected, that is the one place the £120,000 ceiling does not apply.

Joint accounts and business accounts: how the limit is shared

Joint accounts get double protection, but not by doubling the limit per account. Each named holder is treated as owning an equal share of the money, and each has their own £120,000 limit, so a joint account with two holders is protected up to £240,000 in total¹. The FSCS assumes the split is equal unless there is evidence showing otherwise, as the Building Societies Association explains¹⁵. MoneyHelper gives the same position: with a joint account you would automatically get your money back, up to £120,000 per person¹⁶.

The interaction between sole and joint accounts at the same banking group catches many people out. If you hold a sole account and a joint account within the same group, the £120,000 limit applies across all of those accounts for you personally, not to each account separately¹⁰. Your half of the joint money and your sole savings count together towards your one limit.

Business accounts work on the same principle: the limit applies to individuals and companies, not to accounts⁸. A small business that is a separate legal entity, such as a limited company or a limited liability partnership, gets its own £120,000 claim against the bank, separate from the owner's personal accounts with the same bank⁴. A sole trader, by contrast, is not a separate legal entity, so business and personal money with the same bank would be added together under one limit. Charities set up as limited companies are treated the same way, with protection up to £120,000¹⁰.

Banks that share a licence count as one

The single most common gap in people's understanding of the FSCS is that the limit applies per banking group, not per brand¹¹. Several familiar high street names operate under one shared banking licence, and where they do, the FSCS treats them as one bank: the £120,000 limit applies across all accounts held with every brand in that group⁴.

The best-known example is Halifax, Bank of Scotland and Lloyds, which share a licence and count as a single provider for the FSCS limit¹¹. NatWest, Royal Bank of Scotland and Ulster Bank are part of the NatWest Group and share the £120,000 limit between them, as do NatWest and Sainsbury's Bank since Sainsbury's Bank's banking business moved across¹⁷. Tesco Bank's savings, credit cards and loans now sit under Barclays, so the £120,000 limit is shared between the two brands¹⁷. By contrast, Coventry Building Society and The Co-operative Bank continue to exist as separate brands under separate banking licences, meaning up to £120,000 is protected with each¹⁷.

The rule is mechanical: if a current account and a savings account are held with banks in the same banking group sharing a banking licence, they are treated as one bank, and the £120,000 limit is shared across all the accounts within that group, not a separate limit for each bank¹⁴. You can check this yourself in two ways. The FSCS protection checker on its website tells you whether your money is protected and how brands group together¹⁰, and the Financial Services Register shows each firm's authorisation so you can compare brands directly¹⁴. The dedicated guide to FSCS protection when bank brands share a licence works through the groups brand by brand.

Temporary high balances: up to £1.4 million for six months

The £120,000 deposit limit would leave the proceeds of a house sale dangerously exposed, so the rules include a separate protection for temporary high balances. Certain qualifying temporary high balances, described by the FSCS as exceptional and short-lived deposits resulting from major life events, are protected up to £1.4 million for six months from when the amount was first deposited⁴. Which? gives the same figure: it protects up to £1.4 million for six months, compared to the usual limit of £120,000¹⁸.

The events that qualify are the big ones: examples given across the sources include the proceeds of a house sale, a redundancy payment and retirement benefits¹⁸. The FSCS announced in March 2026 that millions of people receiving large sums now have this greater protection, with extra cover of up to £1.4 million available for six months when receiving a large sum after major life events⁶. MoneyHelper notes the same rule for current accounts: the FSCS can compensate up to £1.4 million if the account was credited in the last six months¹².

The protection is deliberately short-lived. It runs for six months from the deposit, on the assumption that a person receiving a life-changing sum will move it into longer-term arrangements, such as paying off a mortgage, buying a property, or spreading it across separately licensed institutions, within that window. After six months, only the standard £120,000 applies.

The Bank of England's explainer states temporary protection will be up to £1.4 million in most cases, with no limit for temporary high balances linked to certain events¹, while the FSCS's own customer information pages state that if the balance is temporary, it covers up to £1 million for up to six months¹⁹, and the FSCS's 2024 annual report also describes temporary high balance protection as covering deposits up to £1 million²⁰. The £1.4 million figure appears in the FSCS's current guidance and its March 2026 press release⁴, and is the one to rely on for failures from December 2025, but the older £1 million figure appears in FSCS documents that have not been updated. Where a claim is large, the FSCS decides the applicable figure from the date of failure and the rules then in force.

Insurance: 90% or 100% of a claim, with no upper limit

Insurance protection works completely differently from deposit protection. There is no cash cap at all: the FSCS protects most types of general insurance at 90% of the claim, without an upper limit⁷. For some types of policy, it pays 100% of the claim, again with no upper limit¹.

The distinction turns on the type of policy. Home, pet, travel, dental, health, warranty, property and public liability insurance claims are paid at 90% of the claim¹⁴. Whole of life assurance claims are paid at 100%²¹. The Bank of England summarises the position as claims being protected at 90% or 100% of the loss suffered, depending on the type of policy the claim relates to¹.

To be eligible, the insurer that failed must have been regulated by the PRA⁷. The protection matters most when an insurer collapses with claims outstanding: policyholders with valid claims under a policy with a failed insurer are paid either 90% or 100% of the claim value²¹. The FSCS also protects the compulsory insurance classes, which is where the 100% figure most often applies.

Investments and pensions: up to £85,000 per person, per firm

Investment protection is capped at £85,000 per person, per authorised firm⁵. The cap applies to investment provision and to claims arising from bad advice: if a firm gave you bad pension advice and has failed, the FSCS can pay up to £85,000 per eligible person, per firm²³. Which? notes the same limit applies to investments, at 100% of the first £85,000 if the firm failed after 1 April 2019¹⁷.

The limit has a history, and the date the firm failed determines which one applies:

For firms that failed before 1 January 2010, the scheme paid 100% of the first £30,000 and 90% of the next £20,000, up to £48,000 per eligible person, per firm³. For failures between 1 January 2010 and 31 March 2019, the limit was £50,000 per eligible person, per firm³. From 1 April 2019 it rose to £85,000, where it stands⁹.

Pensions follow the investment limit in most cases. Where the provider was a SIPP operator that failed after 1 April 2019, the FSCS can pay up to £85,000 per eligible person, per firm²³. For personal pensions, including SIPPs, or workplace defined contribution pensions where the investment provider fails, it may pay up to £85,000 per investment²³. Where the failed firm was your pension provider and it was an insurance firm, the FSCS can normally pay 100% of your claim, with no upper limit²³. Annuities also get FSCS protection with no upper limit²⁵.

Investment platforms keep the old limits, as Which? explains: platforms still have the old limits of £1 million and £85,000¹⁸. The £85,000 limit applies per person, per firm, and Which? describes it as applying per person, per product²⁶. The guide to FSCS protection for pensions, platforms and funds covers how the limit works when your money is held through a platform or nominee.

Funeral plans and debt management firms: £85,000 each

Funeral plans are protected up to £85,000 per eligible person, per firm, provided the provider was regulated by the FCA and went out of business on or after 29 July 2022⁸. That date matters because funeral plans only came into FCA regulation then, and the protection covers plans bought before that date as long as the provider failed after it¹⁴. You can check whether a funeral plan provider is regulated on the Financial Services Register⁸.

Debt management firms are protected up to £85,000 per eligible person, per firm, where the firm failed after 1 April 2019⁹. For firms that failed between 1 April 2018 and 31 March 2019, the limit was £50,000 per eligible person, per firm³. The firm must have been authorised by the FCA and have held client money⁸. One exclusion matters here: the FSCS does not protect money that a debtor pays under an individual voluntary arrangement arranged by insolvency partners, which are not regulated by the FCA⁸.

What FSCS does not protect

The FSCS's protection is wide but not universal, and the gaps fall into clear categories.

E-money and payment services firms. The FSCS states plainly that it cannot protect e-money or payment services firms¹⁰. Where a payments firm itself fails, deposit protection does not apply, as the FCA confirmed when Premier Payment Solutions entered liquidation: the FSCS only applies to certain types of activity and does not cover payment services²⁷. However, the FCA's policy work on safeguarding sets out that the FSCS may look through the payments firm to compensate its customers if the firm's UK safeguarding bank fails, though it does not cover cases where the payments firm itself fails²⁸.

Unregulated cryptoassets. Most cryptoassets are not FSCS protected because they are not regulated, including virtual currencies like Bitcoin and Litecoin²⁹.

Certain insurance classes. Goods in transit, marine, aviation and credit insurance claims are not eligible for FSCS protection, nor are contracts of reinsurance for insurance firms or brokers²¹.

Unregulated arrangements. Money paid under an individual voluntary arrangement arranged by insolvency partners is not protected, because those firms are not FCA-regulated⁸.

Amounts above the limits. Deposits above £120,000 with a single authorised firm, and investment claims above £85,000, are not covered by the FSCS, though a holder of unprotected deposits remains a creditor of the failed firm.

The dedicated page on what the FSCS does not cover works through each exclusion in more detail.

How compensation is paid if a firm fails

For banks, building societies and credit unions, the process is automatic. You do not need to make a claim: the FSCS returns your money automatically, up to the compensation limit³⁰. Balances are added up per person, per licence, and payment is made within seven working days of the failure in standard cases⁴. More complex cases, including temporary high balance claims, take longer⁴.

For other types of firm, a claim is needed. The FSCS can pay compensation if a financial firm has failed and all of the following apply: the firm was authorised, it carried out a regulated activity for you, you lost money, and it owes you a legal liability³². Claims are made through the FSCS's claims process, and the guide to claiming from the FSCS sets out the steps. If you disagree with an FSCS decision, there are routes to challenge it, and unresolved complaints can go to the Financial Ombudsman Service.

When the deposit limit changed

The deposit limit has not always been £120,000. It stood at £85,000 per depositor, per firm until 1 December 2025, when it rose to £120,000². The change came from the Bank of England's Prudential Regulation Authority, which sets the level of depositor protection, and the final level was set at £120,000². For anyone holding more than the old limit, the rise means more of their money is covered without needing to spread it across separate banking licences.

The new limit applies to firms that fail from 1 December 2025⁵. The rise was part of wider changes to depositor protection. The ring-fencing regime that separates retail banking from investment banking within large banking groups is a separate piece of the same architecture, and the Bank of England's explainer on ring-fencing notes the deposit protection change alongside it³³.

For anyone holding more than £120,000 with a single licensed banking group, the practical answer is the same as it has always been: spread the money between separately licensed deposit takers, keeping no more than £120,000 with each. The FSCS's own worked example shows £120,000 with one firm as fully protected, and states that you can protect more than £120,000 as long as it is spread among deposit takers with different FRNs, with each holding no more than £120,000¹⁰. The page on keeping savings above the FSCS limit covered covers the options, and what happens if a bank fails covers the failure process in full.