By HARVEY DORSET

Updated: 11:51 BST, 31 March 2025


The Financial Services Compensation Scheme deposit protection limit could increase to £110,000, if proposals by The Prudential Regulation Authority are given the green light.

The proposed increase from £85,000 would come into effect from 1 December 2025, with depositors guaranteed the higher limit if the firm holding their money fails from this date.

The limit is the maximum amount of money the FSCS will protect if an account-holder’s bank, building society or credit union becomes insolvent. The limit has been set at £85,000 since 2017.

The PRA said the increase takes into account the effects of inflation since the last changed. Based on inflation figures, the value of £85,000 in 2017 is now equivalent to around £111,500.

Sam Woods, deputy governor for Prudential Regulation and chief executive of the PRA said: ‘Confidence in our financial system is an essential foundation for economic growth.

‘We want to support confidence in our banks, building societies and credit unions by raising the amount that people can keep in their account which is covered by the deposit guarantee scheme to £110,000 per person, so all that money is safe even if the firm fails.’

Protection: Currently single accounts are covered up to £85,000 and joint accounts are protected up to £170,000.

Protection: Currently single accounts are covered up to £85,000 and joint accounts are protected up to £170,000.

A consultation on the FSCS protection limit opened today, with the outcome of the process expected to be confirmed in November this year. Any changes to the limit will require approval from HM Treasury.

FSCS protection covers a wide range of financial services firms such as banks, building societies, credit unions, as well as insurance companies, investment firms, mortgage brokers and pension providers.

Protection is across accounts held within a banking group, not per account. Some banks have multiple brand names, such as HSBC and First Direct, meaning depositors are only protected up to £85,000 even if they have accounts with both banks.

While single accounts are covered up to £85,000, joint accounts are protected up to £170,000. It would mean joint protection of £220,000 from December.

Martyn Beauchamp, chief executive of the FSCS, said: ‘Depositor protection is what FSCS is best known for, as it covers the money held in our day-to-day current accounts and savings.

‘Consumers tell us that the existence of FSCS protection is a key driver of their trust in financial services, and this trust is in turn a critical component of stability and growth. It’s important that FSCS’s limit is reviewed to ensure it stays appropriate and relevant.’

The consultation also includes proposals on temporarily high balances – such as for up to six months after a house sale – with a proposed increase to £1.4million from £1million.

The FSCS was established in 200 and has paid compensation of £10.1million to depositors in the past three full financial years, primarily in relation to small credit union failures. 

Since it was established, the FSCS has paid over £20billion, primarily in relation to deposit failures during the financial crisis.

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FSCS limit could rise to £110,000 from December in boost for savers

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