The FSCS limit has risen to £120,000. Here’s what it means for you

On 1 December, the main limit for the Financial Services Compensation Scheme (FSCS) rose from £85,000 to £120,000. This is welcome news as the 41% limit increase offers greater protection for your wealth held in FSCS-registered institutions.

The FSCS has been instrumental in protecting savers’ wealth for more than two decades; according to the FSCS website, it was vital during the 2008 financial crisis, paying out £20.4 billion in compensation to customers of five affected institutions.

Today, the scheme continues to guard UK consumers. In fact, between 2024 and 2025, the FSCS paid out compensation totalling £327 million to 32,634 people.

Read on to learn how the FSCS might offer a layer of protection for your savings, how the new limit increase could benefit you, and the key facts you need to know when saving with an FSCS-registered institution.

The Financial Services Compensation Scheme covers your money when protected financial institutions can’t pay out

You’ve likely seen the distinctive purple FSCS logo before, on your bank’s webpage, mobile app, or in your local branch. Wherever it’s stamped, this badge guarantees that your money is protected by the scheme.

The FSCS was established to protect UK consumers’ savings when financial institutions, such as banks and building societies, are unable to pay out or fail entirely.

When you save with an FSCS-registered financial firm, your savings are covered up to the deposit protection limit, now set at £120,000.

This means that, in the event that your UK-authorised bank, building society, or credit union can’t pay out or even folds, up to £120,000 of your money will be compensated back to you.

Savings in excess of this limit risk disappearing along with the financial institution.

More of your money is protected thanks to the Financial Services Compensation Scheme limit increase

The FSCS deposit protection limit increase offers two major benefits to your financial security:

• You now have an extra £35,000 worth of FSCS protection per institution (more on this later).
• Joint accounts now offer an extra £70,000 of financial protection – up to £240,000 – as they combine the FSCS limits of two individuals.

The FSCS protection limit for temporary high balances is also increasing from £1 million to £1.4 million. This protection lasts up to six months and covers large cash influxes from major life events, such as:

• Selling your main home
• Receiving an insurance payout
• Redundancy
• Inheriting wealth
• A settlement from a divorce.

The FSCS limit change for temporary high balances is also effective from 1 December 2025.

3 key facts you need to know about the Financial Services Compensation Scheme

While the increase in the protection limit is good news, here are three things you need to be aware of when saving money with an FSCS-protected bank.

1. Not all banks are protected

Generally, any institution that is UK-authorised by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA) will be FSCS-protected.

However, don’t assume your bank or building society is covered without checking first, as you could risk losing your savings should your provider fail if it is not covered under the FSCS.

The FSCS website offers a bank and savings protection checker tool that you can use to verify whether your institution is included.

2. The limit is not changing for other protected services

This change is specifically for the FSCS deposit protection limit, which applies to banks, building societies, and credit unions. The new change does not affect limits or schemes regarding:

• Debt management
• Funeral plans
• Insurance
• Insurance brokers or financial advisers
• Investments
• Mortgages
• PPI
• Pensions
• Mutual and friendly societies.

While all these services can be FSCS-protected, they each have separate limits and criteria that are unaffected by the recent changes.

3. FSCS protection covers individual banking licences, not individual bank accounts

Another mistake that people make is assuming that FSCS protection extends to individual bank accounts.

In reality, protection applies per institution, which refers to specific banking groups with their own banking licence.

For instance, NatWest Group includes three main banks: NatWest, the Royal Bank of Scotland, and Ulster Bank. These brands all operate under the same banking licence. So, if you have accounts with more than one of these banks, your FSCS protection limit would be £120,000 in total across all those savings, rather than £120,000 for each specific account.

If your savings wealth exceeds £120,000, you could split the excess across different institutions to maximise your protection.

As an example, if you have savings totalling £150,000, you might keep the first £120,000 in your accounts registered to any NatWest Group bank.

Then, instead of lumping the additional £30,000 in with the rest, you could move it to another institution with its own separate FSCS protection, such as Santander.

In doing so, you ensure that, if either or both of these banks fail, all your savings are covered by the FSCS.

Speak to a financial planner for help with managing your savings

At Caliber Financial Management, we stay on top of national and global financial news – such as the recent FSCS limit increase – so that you don’t have to.

That said, if you have any concerns about this recent change or any other aspect of your savings or investments, get in touch with us today.

Email contact@caliberfm.co.uk or give us a call on 01525 375286 for informed financial advice.

Please note

This article is for general information only and does not constitute advice. The information is aimed at individuals only.

All information is correct at the time of writing and is subject to change in the future.