The Financial Services Compensation Scheme (FSCS) deposit protection limit will rise to a bumper £120,000 from 1 December 2025.
The amount of cash protected if a bank or building society goes bust will rise for the first time in eight years, the Prudential Regulation Authority (PRA) today confirmed.
From December, if a UK-authorised bank, building society or credit union goes out of business, FSCS will compensate eligible customers up to the new limit of £120,000, per person, per authorised firm.
This is a 41 per cent rise from the current £85,000 and is a bigger boost than expected – we recently revealed the FSCS limit was set to rise in December, but it was expected to be £110,000.
The PRA said the limit has been changed in light of consultation feedback from firms and to reflect the latest inflation figures.
The current limit of £85,000 has been the same since 2017.
The FSCS deposit protection limit has been boosted to a higher than expected £120,000 from 1 December 2025
Joint account holders will have up to £240,000 guaranteed under the scheme. Currently the FSCS limit is £170,000 for joint account holders.
Sam Woods, chief executive of the PRA says: ‘This change will help maintain the public’s confidence in the safety of their money.’
Andrew Hagger, founder of independent information website MoneyComms says: ‘It’s good news for savers as it gives people some additional headroom when investing larger sums with a single savings provider.
‘For those who have to split funds across multiple providers this may help cut down the number of accounts they need to open to remain FSCS safe.
‘For example for someone currently with £340,000 would need to split this into four separate pots with different providers. With the limit increased to £120,000 they’ll only need to open three accounts.’
Temporary high balance cover rising to £1.4m
The amount of cover for so-called ‘temporary high balances’ – where bank balances receive an injection of cash from life events such as moving house or receiving an inheritance – will also rise, from £1million to £1.4million.
Temporary high balances will be protected up to £1.4million for six months from when the money is enters your account.
Savers don’t need to do anything ahead of the new limit being imposed.
The new deposit protection limit will automatically apply from 1 December.
There will be a transition period for banks and building societies from 1 December until 31 May 2026, where firms will update materials notifying customers of the new limits.
At the same time, the FSCS has updated its ‘FSCS protected’ badge to make it clear to savers which accounts cover their savings and deposits, which will be rolled out across accounts until May 2026.
Martyn Beauchamp, FSCS chief executive, says: ‘Whether it’s everyday cash, rainy-day savings or temporary high balances after a big life event like selling a home, everyone wants to know their money is safe.
‘That’s why this increase in deposit protection matters.’
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