The Prudential Regulation Authority (PRA) has today confirmed that the Financial Services Compensation Scheme (FSCS) limit will rise to £120,000 from 1 December.
The current limit is £85,000, which is the maximum compensation each institutional financial services customer can receive in the event of a company failure.
The increase to £120,000 is the first time FSCS has increased its deposit limit since 2017.
Martyn Beauchamp, chief executive of FSCS, said: “This price increase ensures consumers can be confident their money is safe, from the first penny to £120,000.”
The PRA’s consultation on the issue initially proposed a limit of £110,000, which was later raised by £10,000 to reflect the latest inflation data and feedback from financial firms and experts.
The new restrictions will apply automatically from 1 December.
PRA chief executive Sam Woods said: “This change will help maintain public confidence in the security of their funds.
“This means that if a bank, building society or credit union fails, savers will be protected up to £120,000. Public confidence underpins the strength of our financial system.”
The temporary high balance cover limit of £1 million will also increase to £1.4 million from 1 December.
Rachel Springall, finance expert at Moneyfacts, said: “This is important for people who carry large balances through no fault of their own during major life events, such as receiving a large inheritance or holding on to cash from a house sale.
“Those who store cash in a current account would be wise to transfer it to a savings account if they expect to hold the cash for more than six months to earn a better interest return. It is particularly important to allocate funds to different UK authorized banks, building societies or credit unions to stay within FSCS deposit protection limits.”
The FSCS first consulted on increasing deposit limits in March 2025.
