FSCS deposit protection limit rises to £120,000

Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, comments on the Financial Services Compensation Scheme (FSCS) deposit protection limit increase, confirmed today, to take effect on 1 December 2025.

“It is great news for consumers for the FSCS to increase the UK deposit protection limit to £120,000 from December 2025. Savers who have their cash stashed with an institution that goes under will benefit from the higher limit, which gets reviewed every five years, the last limit of £85,000 was set in 2017. It is interesting to see that the new limit is a bit higher than the Prudential Regulation Authority’s (PRA) initial proposal to increase the limit to £110,000, off the back of feedback and to ‘reflect the latest inflation data’.

“More good news comes from the fact that the six-month temporary high balance cover will also be increased to £1.4 million. This is incredibly important for those who, by no fault of their own, hold significant balances from major life events, such as receiving a significant inheritance or holding cash from a house sale. Those who have the cash stored up in a current account would be wise to shift it to a savings account, if they anticipate holding it for more than six months to earn a better return of interest. It is particularly important to split the funds with different UK-authorised banks, building societies or credit unions to keep within the FSCS deposit protection limit.

“Consumers must stay vigilant on where they invest their hard-earned cash, it’s simple to recognise those institutions that are covered by the FSCS, and there is a newly designed badge to make the protection more distinctive. Consumers can also head over to the official bank and savings protection checker on the FSCS website to ensure their money is protected.”