FSCS to protect up to £120,000 of customers’ money as limit increases

The higher limit will come into effect from 1 December 2025.

The Prudential Regulation Authority (PRA) confirmed today (18 November 2025) that the UK deposit protection limit will rise from £85,000 to £120,000 on 1 December 2025.

This means that customers will soon be able to claim back a maximum of £120,000 under the Financial Services Compensation Scheme (FSCS) if their UK bank, building society or credit union goes bust.

The FSCS deposit protection limit applies to each individual authorised firm. However, if firms share a banking licence, the FSCS treats them as the same provider so the limit will apply to money held across all these firms. See which providers share a banking licence in our who owns whom guide.

“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,” Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, commented.

The FSCS limit is reviewed at least every five years and has stood at £85,000 since 2017.

There were talks earlier in the year about raising the FSCS limit to a possible £110,000 but, after consultations and taking the rate of inflation into consideration, the PRA finally decided to increase it to £120,000.

The temporary high balance (THB) limit will also change on 1 December, rising from £1 million to £1.4 million. This limit applies in specific circumstances when your bank balance may be temporarily higher, such as if you’re selling a house or you’ve just received an inheritance payout.

“This is incredibly important for those who, by no fault of their own, hold significant balances from major life events,” Springall noted, adding that “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” as this will allow them to earn a better return of interest.

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How will this affect your money?

The increased limit will apply automatically from 1 December, which means all UK customers will be protected up to £120,000 per provider.

While this change is unlikely to have a major impact on the day-to-day finances of many customers, it can offer extra reassurance to those with higher amounts in savings as they can now keep up to £120,000 with a single provider, secure in the knowledge that they will be fully compensated if it collapses.

As a result, this could encourage savers to deposit more of their money in savings accounts that pay higher interest.

For example, if the limit remained at £85,000, someone with £100,000 in savings may have opted to split their money between different providers to ensure it would be protected in full.

By contrast, with the higher limit, they could deposit the full £100,000 with a provider paying the most competitive interest rate, knowing that their money would be fully protected. This could help them get a better return on their money than if it was divided between the higher-paying account and a different, lower-paying account.

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Even though the higher FSCS limit provides customers with added protection, Springall warns that “consumers must stay vigilant on where they invest their hard-earned cash”.

It’s crucial to keep an eye on how much you have deposited with a single provider (especially if it shares a banking licence) to make sure your money is still fully protected.

Those with large sums in savings should split their funds with different UK-authorised banks, building societies or credit unions to keep within the FSCS deposit protection limit.