PRA confirms FSCS deposit limit to be increased to £120,000
The Prudential Regulation Authority (PRA), which is part of the Bank of England and one of the UK’s main financial regulators, has confirmed that the Financial Services Compensation Scheme (FSCS) deposit protection limit will rise from £85,000 to £120,000, effective 1st December 2025. This marks the first increase since 2017 and is designed to reflect inflation and strengthen consumer confidence in the financial system.
What Does This Mean for You?
This means that if your UK-authorised bank, building society, or credit union fails, the FSCS will now compensate eligible customers up to £120,000 per person, per authorised firm. Joint accounts will enjoy protection up to £240,000.
Additionally, the limit for temporary high balances (such as proceeds from a house sale or inheritance) will also rise from £1 million to £1.4 million, covered for six months.
Why the Change?
The previous limit of £85,000 was set in 2017. Since then, inflation has eroded its real value. The PRA initially proposed £110,000 but increased it to £120,000 following consultation feedback and updated inflation data. This move aims to maintain public confidence and ensure the UK’s financial safety net remains robust.
What Should Savers Do?
Check Your Accounts. Remember, the limit applies per authorised firm, not per brand. Some banks operate multiple brands under one licence. To see if your bank's protected, use the Financial Services Compensation Scheme's checker. Take care to get the name of the bank right, and check that the six-digit 'FRN' under the bank's name matches the Financial Conduct Authority register number the bank lists on its own website.
Look for the FSCS Badge. The FSCS is rolling out a refreshed “FSCS Protected” badge to help consumers identify covered institutions. The FSCS protection only applies to companies regulated by the FCA, so if your savings are held offshore check with your bank where it is regulated and what protection applies.
This article is for general information and does not constitute personal financial advice. If you’re unsure what’s best for you, seek independent financial advice.
