Who Is Not Covered by FSCS Deposit Protection

Most people with money in a UK bank, building society or credit union are covered by the Financial Services Compensation Scheme (FSCS) if the firm fails. The scheme protects up to £120,000 per person or company, per authorised firm¹. That limit applies across all your accounts with that firm, not to each account separately².

But not everyone is covered, and not every kind of money is. Authorised financial services firms are excluded, whatever their size³. Large businesses are usually excluded too, though there are some exceptions for deposits and insurance⁴. Money held with banks outside the UK is not covered, and neither are e-money or payment services firms⁵.

The exclusions matter most to people who hold money in more than one name, run a business, or save through an app or platform rather than directly with a bank. This page sets out who is left out, what still counts as protected, and how to check your own position.

Authorised financial firms are excluded, whatever their size

The clearest exclusion is also the one most people never encounter. Authorised financial services firms are not protected by FSCS deposit protection, and there is no size test: a small authorised firm is excluded just as a large one is³. Most businesses are protected, but authorised financial services firms are not³.

The exclusion list is long and specific. Deposits held by credit institutions, financial institutions, investment firms, insurance undertakings, reinsurance undertakings, collective investment undertakings, pension or retirement funds, and public authorities other than small local authorities are all excluded⁶. Cater Allen, a bank owned by Santander, sets out the same list in its own FSCS information sheet⁷. Deutsche Bank's terms state that FSCS coverage for deposit protection does not apply to certain types of claimants, including authorised persons⁸.

There is one notable exception that has widened over time. Deposits from large companies and small local authorities have been covered by FSCS deposit protection since 30 January 2017, up to the £120,000 limit⁹. So a large company is not automatically excluded, and a small local authority is not either.

For a consumer, the practical point is this: if you hold money through a firm that is itself authorised to carry on financial services, that money may sit outside the scheme. That is most relevant to people running limited companies, partnerships or trusts, and to anyone whose savings are held by a financial business rather than in their own name.

Deposits held for someone else: when the underlying beneficiaries are still covered

Money held on behalf of someone else is not automatically excluded. Deposits held on behalf of underlying beneficiaries who are eligible for FSCS protection are not excluded¹⁰. The same wording appears in the FSCS information sheets of BLME, Chase, Atom bank and Accord Mortgages¹¹.

That matters for anyone whose savings are held in a nominee arrangement, a trust, or a platform that pools customer money. The test is whether the underlying beneficiary would be eligible in their own right. If they would, the deposit is not excluded just because someone else holds the legal title.

Pension schemes get a similar carve-out. Personal, stakeholder and occupational pension schemes for micro, small and medium sized companies are not excluded¹⁵. So a small company pension scheme's deposits are not shut out of protection simply because a scheme, rather than an individual, is the account holder.

Joint accounts are also eligible for FSCS protection up to the same limit of £120,000 per eligible person⁵. Two people with a joint account therefore have £240,000 of cover between them, not £120,000 shared.

Where FSCS protection does not apply: banks outside the scheme

FSCS can only protect money held by UK branches of authorised banks, building societies and credit unions⁵. Banks located outside the UK are not covered by the FSCS¹⁶. A deposit is also excluded if it is not held at a UK establishment, or a Gibraltar establishment of a UK-incorporated firm¹⁷.

This is the exclusion that catches people who bank with an overseas provider that offers sterling accounts, or who move money to a bank that operates in the UK without a UK banking licence. The FSCS protection checker will not list a firm that is outside the scheme⁵.

There is a separate rule for firms that share a banking licence. If you have money in multiple accounts with multiple banks that are part of the same banking group and share a banking licence, they are treated as one bank, with the £120,000 limit applying across all accounts⁶. Protection is across all accounts held within the bank or banking group, not per account³. The Bank of England's explainer makes the same point: anyone who has accounts under different brands owned by the same firm is still only protected up to £120,000¹⁸.

So the number of brands on your statements is not the number of limits you get. Two accounts with two brands under one licence share one £120,000 limit.

Is a small business covered by FSCS deposit protection?

Most businesses are protected, but the limit depends on how the business is structured. If your business is a separate legal entity, such as a limited company or an LLP, you could claim up to £120,000 for each account⁶. A sole trader is different: your company is not treated as a separate entity, so FSCS can protect up to £120,000 in total across all personal and business accounts with the same bank³.

Partnerships have their own rule. Where joint account holders act as business partners, the business partnership is only entitled to a single claim of £120,000, not one claim per business partner⁶.

Large businesses are usually excluded, although there are some exceptions for deposits and insurance⁴. The 2017 change that brought large companies and small local authorities into deposit protection is the main exception⁹.

For a small business owner, the practical questions are whether the business is a separate legal entity, and whether personal and business money sit with the same bank. A limited company with its own account gets its own £120,000 limit. A sole trader with a personal account and a business account at the same bank does not.

Can I lose FSCS protection if my bank never verified my identity?

Yes. A deposit is excluded from protection if the holder and any beneficial owner have never been identified in accordance with money laundering requirements¹⁷. Deposits linked to a criminal conviction for money laundering are also excluded¹⁷.

This is not a rule most savers will trip over, because banks are required to verify identity before opening an account. But it is a reminder that the protection depends on the bank knowing who you are. Your bank, building society or credit union will confirm eligible deposits on your statement of account and inform you of any exclusions from protection which may apply¹⁹.

If you are unsure whether your money is covered, the FSCS website has a checker where you can look up a firm⁵. Mutual insurers do not appear in the checker, except credit unions that can take deposits⁵. Your provider's own FSCS information sheet should also set out the exclusions that apply to your account²⁰.

Insurance claims that are not protected, from credit to marine

FSCS also covers insurance, but some kinds of cover are outside the scheme. Goods in transit, marine, aviation and credit insurance are not eligible for FSCS protection, and neither are contracts of reinsurance for insurance firms or brokers or financial advisers²¹. The FSCS website lists marine, aviation, credit insurance and contracts of reinsurance as ineligible²².

Credit insurance is the one most consumers are likely to meet, because it is often sold alongside a loan or a credit card. It is not covered²². Payment protection insurance, which is a form of credit protection, sits in the same category.

Payment services are outside the scheme too. FSCS only applies to certain types of activity and does not cover payment services²³. When Premier Payment Solutions Ltd entered liquidation, the FCA confirmed that the FSCS does not cover payment services²³. FSCS cannot protect e-money or payment services firms⁵.

There are also claimant rules for insurance distribution claims. Bodies corporate, partnerships, mutual associations and unincorporated associations which are not small businesses are excluded where the claim relates to protected non-investment insurance distribution²⁴.

Where insurance claims are covered, the payment rate varies. Employers' liability claims are paid at 100%, while health claims are paid at 90%²¹. So even inside the scheme, not every claim is met in full.

How do I check whether my bank is part of the FSCS scheme?

The FSCS website has a protection checker that lists firms in the scheme⁵. You can search by the brand name you know, and the checker will tell you whether the firm is covered. Mutual insurers do not appear in the checker, except credit unions that can take deposits⁵.

Your provider should also tell you directly. Banks, building societies and credit unions confirm eligible deposits on statements of account and inform customers of any exclusions from protection that may apply¹⁹. Virgin Money, for example, points customers to the FSCS website for details on the protection of eligible deposits and deposits excluded from the scheme²⁶.

If a firm is not in the checker, that does not always mean your money is unprotected. It may mean the firm is not a deposit taker, or that it holds your money in a way that puts protection elsewhere. If an aggregator deposited your money with a regulated bank that then fails, it is likely that FSCS will protect it⁵.

What is covered, and what is not

Where to get help

If you are unsure whether your money is protected, the FSCS website is the starting point: it has a protection checker and information sheets setting out eligible and excluded deposits⁵. Your own bank, building society or credit union should confirm eligible deposits on your statement and tell you about any exclusions¹⁹.

If a firm you saved with has failed, FSCS handles claims directly. The claims process involves the firm's insolvency practitioner and FSCS working together, and FSCS publishes guidance on who is involved and the eligibility rules³⁰.

For free, impartial help with savings questions more generally, MoneyHelper is the government-backed service. For debt problems, StepChange and other debt advice charities offer free advice. If you have a complaint about a financial firm that you cannot resolve, the Financial Ombudsman Service can look at it.