FSCS raises deposit compensation limit to £120,000

The Financial Services Compensation Scheme (FSCS) increased the compensation limit for eligible deposits held with UK-authorised banks, building societies and credit unions from £85,000 to £120,000 on 1 December 2025¹. The change followed a Prudential Regulation Authority (PRA) consultation on a proposed increase in March 2025 and confirmation of final rules in November 2025¹. Between 1 January 2017 and 30 November 2025 the limit was £85,000¹.

The new limit applies per eligible person, per authorised firm, and covers deposits, current accounts and savings accounts². Money held in multiple accounts with banks in the same banking group that share a banking licence is treated as one bank, so the £120,000 limit applies to the total held across those accounts rather than to each account separately². Joint accounts are eligible for protection up to the same £120,000 per eligible person, which Which? describes as protection of up to £240,000 for a joint savings account if a firm fails².

Separately, FSCS protects temporary high balances of up to £1.4 million for six months, which may arise from major life events such as selling a home or receiving an inheritance². The £120,000 limit applies only to deposits and savings; other FSCS protection limits, including those for pensions, investments, insurance, mortgages, PPI, debt management and funeral plans, are unchanged¹.

FSCS states it can only protect money held by UK branches of authorised banks, building societies and credit unions, and cannot protect e-money or payment services firms². Savings marketplaces, cash platforms and deposits aggregators are not themselves protected, though if an aggregator deposited money with a regulated bank that then failed, FSCS says it is likely to protect it, on the same limits as other bank accounts². The protection checker covers cash deposits but not investments or savings products structured as long-term contracts of insurance, as offered by some mutual insurers².

Why it matters for households

The higher limit means more of a household's deposited savings falls within the deposit guarantee scheme than before 1 December 2025. For a single account holder, the protected amount per firm rose by £35,000; for a joint account with two holders, Which? puts the combined figure at up to £240,000³. Because protection is applied per firm and shared across brands under one licence, savers holding accounts with several brands in the same banking group are covered once against the £120,000 total, not once per brand². Anyone holding more than the limit with a single firm has the excess outside the scheme, and FSCS says compensation is paid within seven working days of a bank, building society or credit union failing². The limit change does not affect non-deposit products, which have their own limits¹.

What happens next

Under the Deposit Guarantee Scheme Regulations 2015, the PRA is required to review the FSCS deposit compensation limit periodically and at least every five years¹. No further change to the deposit limit has been reported.