How FSCS protection works for savings

If a UK bank, building society or credit union goes bust, the Financial Services Compensation Scheme (FSCS) pays you back the money you held with it, up to £120,000 per person, per firm¹. The protection is automatic: you do not pay for it, opt in to it or fill anything in. Since 1 December 2025 the deposit limit has been £120,000, and for a joint account with two holders the cover runs to £240,000³.

The FSCS is not a bank guarantee or an insurance policy you buy. It is the UK's statutory compensation scheme of last resort, set up under the rules that govern financial services, and it steps in when a financial services provider fails and cannot pay back your money itself¹. It covers far more than savings: deposits, insurance, investments, pensions and mortgage advice are all within its scope when a UK-authorised firm fails². For most people, though, it is savings protection that matters day to day, and the scheme is best known for protecting deposits held in banks, building societies and credit unions⁴.

The limit applies per authorised firm, not per account. That single rule explains most of the practical questions people have about FSCS protection: why two accounts with the same bank do not double your cover, why some brands count together and others do not, and how to protect a sum larger than £120,000. This page works through each of those in turn.

What the FSCS is and what it pays out

The Financial Services Compensation Scheme is the body that compensates customers when a financial firm fails. As the FSCS puts it:

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It covers a range of products when a UK-authorised firm goes under, including deposits, insurance, investments, pensions and mortgage advice². The Bank of England, whose Prudential Regulation Authority authorises the deposit-taking firms at the heart of the scheme, describes it as the compensation scheme that protects depositors: anyone with accounts under different brands owned by the same firm is still only protected up to £120,000 across those brands³.

The scheme is free to consumers and funded by the industry, not by the government or by fees charged to savers. The government confirmed when the limit was last changed that the FSCS deposit protection limit covers losses that retail customers and small businesses suffer as a result of a failure⁵. So a personal saver, and in many cases a small business, are both within the scheme's scope.

What the FSCS pays out depends on the type of product. For deposits, it pays the balance held with the failed firm, capped at the limit. For insurance it is typically 90% of a claim with no upper limit, and for investments and pensions the rules work differently again². This page concentrates on deposits, because that is what most savings are, and the later sections on what FSCS cover does not protect explain where the boundaries sit.

Which savings accounts are covered

Deposit protection covers the money a provider holds for you as a deposit, and the FSCS lists that coverage as including deposits, current accounts and savings accounts⁶. The Bank of England gives a fuller list of what counts: current accounts, savings accounts, cash ISAs and savings bonds³. In other words, the ordinary savings products described across this site's guide to savings accounts are all, as a rule, deposits.

Two points about how the cover is measured matter more than the product list. First, protection is across all accounts held within the bank or banking group, not per account⁷. A current account, an easy access savings account and a cash ISA with the same provider all draw on the same £120,000. Second, the FSCS treats "deposits" broadly: they include things like current and cash savings accounts⁷.

The quickest visual check is the FSCS Protected badge. The FSCS explains that the badge indicates a PRA-authorised bank, building society or credit union is protected by FSCS, and states it can automatically compensate you, up to £120,000 per eligible person, per firm⁸. Seeing the badge on a provider's website or app is a good sign, but it is not a substitute for checking which firm is actually behind your account, because the badge tells you the firm is protected, not how many of your accounts share one limit.

One further wrinkle: some savings products sold by insurers, structured as long-term contracts of insurance issued by regulated mutual insurers, may fall under insurance protection rather than deposit protection⁹. These are uncommon, but if a "savings plan" is not a deposit, the rules on this page do not apply to it, and the provider's terms will say which regime it sits under.

Banks, building societies and credit unions: how cover applies to each

The FSCS can only protect money held by UK branches of authorised banks and building societies and credit unions⁶. That sentence carries three separate categories, and each works the same way in substance: £120,000 per person, per authorised firm.

• Banks. Money held with a UK-authorised bank is protected up to £120,000 per person, per firm, across all your accounts with that banking group¹⁰.
• Building societies. Identical treatment. A building society is a separate authorised deposit taker, and the limit applies across all accounts you hold with it¹⁰.
• Credit unions. Credit union savings, which are often called shares, are protected by the FSCS on the same basis as bank and building society savings, up to £120,000 in total across all accounts you hold with the credit union¹¹.

Credit unions sometimes cause confusion because their savings are described as shares. The Welsh Government's guidance is typical of official descriptions: loans and savings at credit unions are protected by the Financial Services Compensation Scheme¹². A credit union itself makes the point plainly:

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The level of cover has not always been stated the same way. A Scottish Government publication from 2016 described credit union savings as covered up to £75,000 per person, exactly the same protection as savings in a bank or building society¹⁴. That figure reflects the limit of the time; the principle it states, that credit union savers get the same protection as bank savers, still holds, at today's £120,000 level. More on the changing figures in the section on why the £85,000 figure is out of date.

If you save with a provider you cannot find in the FSCS checker, the reason is usually one of two things: it is not UK-authorised, or it is not a deposit taker at all. The FSCS is explicit that it can only protect money held by UK branches of authorised banks and building societies⁹. The comparison between credit unions and banks is covered in more detail on the credit unions vs bank savings accounts page.

Two brands, one licence: when accounts count together

The rule that catches most people out is that FSCS protection applies at firm level and may be shared across brands under the same authorisation⁶. 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 of them¹⁰.

The Bank of England states the same rule from the other direction: anyone who has accounts under different brands owned by the same firm is still only protected up to £120,000³. So the question to ask about any two providers is not whether they have different names, but whether they hold different banking licences.

Both arrangements exist in the real market. Some brands share a licence and count together; others keep separate licences even after coming under common ownership. Which? notes the example of Coventry Building Society and The Co-operative Bank, which continue to exist as separate brands operating under separate banking licences, meaning up to £120,000 is protected with each¹⁵. A saver who held £120,000 with each would be fully protected on both balances; the same sums with two brands sharing one licence would leave £120,000 exposed.

There is no way to tell from a brand's name, marketing or app design which situation applies. The FSCS protection checker on its website lets you search a brand and see which authorised firm stands behind it, and whether other brands share that firm⁶. Checking before you open a second account is the only reliable method, and it takes a few minutes. The FSCS gives a worked illustration of the same point: spreading a large sum across firms with different firm reference numbers (FRNs), with no more than £120,000 at each, protects the whole amount⁶.

Why the £85,000 figure on some pages is out of date

The limit was £85,000 for years, and a great deal of material still quotes it. The change is recent and precise: on 1 December 2025 the FSCS deposit protection limit rose to £120,000¹⁶. Which? puts the same point in consumer terms: the scheme protects up to £120,000 of savings, and before 1 December it was £85,000, per individual, per financial institution¹⁷.

Older figures go back further. A consultation response from Which? in 2024 referred to the FSCS limit as "currently £85,000"¹⁸, and a 2018 news article described savings as protected up to £85,000 per person, per institution¹⁹. None of these pages is wrong about its own date; they are simply describing the limit as it stood then. The FSCS's own current leaflet states the position today:

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The practical consequence is simple: if you read that your savings are protected up to £85,000, you are reading something at least ten months out of date. The current figure for working out whether any balance is fully covered is £120,000 per person, per firm¹⁶. One exception is worth noting: some savings products, such as certain long-term insurance-based plans, sit under different protection rules with different limits, so the £120,000 deposit figure does not describe the whole market⁹.

Joint accounts: £240,000 for two holders

Joint accounts are eligible for FSCS protection up to the same limit of £120,000 per eligible person². Because each named holder is treated as owning half the balance, a joint account with two holders is protected up to £240,000 in total³.

The FSCS's own consumer leaflet gives the same figure:

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Which? explains the mechanics: the balance is split between the holders, so a couple gets coverage of £240,000 in total¹⁵. Two things follow. First, a couple with more than £240,000 in one joint account has money above the limit, and the section on what happens to money above the FSCS limit covers that position. Second, each person's half counts towards their own £120,000 with that firm: if one holder also has £100,000 in sole accounts with the same bank, their share of the joint money and their sole balances add together towards one limit¹⁰.

MoneyHelper states the rule in one line: the FSCS savings protection limit is £120,000, or £240,000 for joint accounts, per authorised firm²². The detail on how the split works, including accounts with three or more holders, is on the joint savings accounts and FSCS cover on joint savings accounts pages.

Saving more than £120,000: spreading money between providers

The FSCS states the strategy plainly: you can protect more than £120,000 as long as it is spread among deposit takers with different FRNs, and each holds no more than £120,000⁶. Its own worked example for protecting £300,000 puts £120,000 with one authorised firm, such as Barclays, fully protected, and the remainder with other firms holding separate licences⁶.

In practice, spreading money means:

1. Work out how much you hold with each banking group, counting current accounts, savings accounts and cash ISAs together⁷.
2. Check which authorised firm stands behind each brand, using the FSCS protection checker, so you do not accidentally hold two balances with one licence⁶.
3. Keep no more than £120,000 with any single authorised firm⁶.
4. Re-check after any merger, takeover or rebrand, because brands that once had separate licences can come to share one¹⁵.

A few related points are worth knowing. A business that is a separate legal entity, such as a limited company or LLP, could claim up to £120,000 for each account, so a personal account and a business account with the same bank are protected separately¹⁰. And temporary high balances, such as a house sale proceeds sitting in an account, can be protected up to £1.4m for six months after a qualifying life event, a rule covered in full on the temporary high balance protection page⁶.

Which? makes the same point when advising on emergency funds: the protection is £120,000, and money above that with one institution is not covered²³. Alternatives exist for larger sums, including NS&I, where savings are backed by the Treasury rather than the FSCS, and cash savings platforms, which spread deposits across multiple banks for you. The FSCS notes that if an aggregator deposited your money with a regulated bank that then fails, it is likely that FSCS will protect it⁶.

How compensation is paid if a provider fails

Deposit compensation is designed to be fast and largely automatic. The FSCS states it will pay compensation within seven working days of a bank, building society or credit union failing¹⁰, and that it will automatically pay back customers' money within seven working days in most cases⁷. Its consumer leaflet gives the same commitment: in most cases, for deposits, FSCS aims to pay compensation within seven days²⁴. Which? reports that deposit failures are paid within seven days of making a claim, and that most commonly the FSCS says these claims are paid in two or three days¹⁵.

Not every case is standard. More complex cases, including temporary high balance claims, take longer¹⁰. And other types of FSCS claim run on entirely different timetables: Which? notes that endowment claims, home finance and mortgage compensation typically take six months to come through¹⁵. The seven-day commitment is specific to deposits.

Behind the speed sit formal conditions. The FSCS's eligibility rules state you can claim 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 liability²⁵. The rulebook adds the mechanics: the FSCS may pay compensation where an eligible claimant has made an application, the claim is in respect of a protected claim against a person in default, and where required the claimant has assigned their rights to the FSCS²⁶. For most depositors none of this is visible: NS&I summarises the consumer experience when it says that if your bank goes bust then you'll automatically get your money back²⁷.

Money above the limit is not lost automatically, but it is not protected. It becomes a claim against the failed firm's remaining assets, which may return some of it, slowly. The what happens to money above the FSCS limit page covers that process.

What FSCS cover does not protect

Deposit protection has firm boundaries, and several of them catch people out.

• E-money and payment services. The FSCS cannot protect e-money or payment services firms⁶. The FCA made the point in plain terms when a payment firm entered liquidation: "The FSCS only applies to certain types of activity and does not cover payment services"²⁸. Money held in app-based wallets and prepaid accounts is safeguarded rather than compensated, a difference explained on the savings app or bank account page.
• Investment losses. FSCS investment protection covers the costs of a company going bust, not poorly performing investments¹⁹. Which? makes the same point about stocks and shares ISAs: the protection does not cover losses from your actual investments, it is the company holding your investments that is covered²⁹.
• Non-UK firms. Only money held by UK branches of authorised banks and building societies is protected⁹. Savings held offshore, or with a firm authorised only overseas, sit outside the scheme.
• Amounts above the limit. Balances above £120,000 per person, per firm, are not compensated, though they may partly be recovered from the failed firm's assets.

The scheme's other arms have their own limits, which are not deposit limits. Most types of general insurance are protected at 90% of a claim, without an upper limit², a level a Bank of England review noted has been described as inadequate by some respondents³⁰. Annuities get FSCS protection with no upper limit³¹. These figures do not change your savings cover, but they matter if you are reading about FSCS protection in other contexts and seeing different numbers.

Finally, the FSCS itself advises knowing how much of your money it can protect before you sign up to anything³². That is the practical test for every product discussed on this page: is it a deposit, is the firm UK-authorised, and how much of your money sits with that one firm?

Where to check and get help

The FSCS protection checker on the FSCS website is the authoritative tool: it tells you whether a brand is protected, which authorised firm stands behind it, and whether your accounts share a licence⁶. If you cannot find your provider, the FSCS's guidance on unfindable firms explains that it can only protect money held by UK branches of authorised banks and building societies, and covers the other cases, including savings products structured as insurance contracts⁹.

Before making a claim, the FSCS sets out what each type of claim needs for it to be processed, from deposits through to pensions and PPI³³. For deposits, the process is usually started by the FSCS itself when a firm fails, but the eligibility rules are worth knowing in advance: the firm was authorised, it carried out a regulated activity for you, you lost money, and it owes you a legal liability²⁵.

Free, impartial help is available from MoneyHelper, the government-backed money guidance service, whose guides to savings products set out the protection limits in plain terms²². Which? also publishes consumer guidance on what to do if your bank goes out of business, including the practical steps after a failure¹⁵. If you believe you have been mis-sold or badly treated in connection with a failed firm, the Financial Ombudsman Service can consider complaints, and the wider landscape of consumer protection in UK financial services is covered elsewhere on this site. One warning belongs here rather than anywhere else: firms claiming FSCS protection they do not have are a known scam pattern, and the savings and fake bond scams page explains how they work.