Major protection boost for UK savers as FSCS raises limit for December 2025
FSCS deposit protection limit climbs to £120,000
From 1 December 2025, the Financial Services Compensation Scheme (FSCS) deposit limit increases from £85,000 to £120,000, boosting protection for UK savers.
New PRA rules mean up to £120,000 of eligible cash at UK-authorised banks, building societies, or credit unions is covered. This change supersedes the previous £85,000 cap, in place since 2017, and offers stronger financial assurance to depositors.
Not only has the cap increased for standard accounts, but the limit for temporary high balances rises from £1 million to £1.4 million. This applies to significant events such as property transactions, insurance payouts, or inheritance settlements. For such cases, the FSCS protects customers’ funds for six months after crediting to an account. Additionally, protection covers all accounts within a single banking group that shares a licence, up to the compensation maximum.
The new £120,000 threshold is automatically paid, typically within just seven days, upon a firm collapsing. Since the scheme operates on a per-person, per-firm basis, savers can benefit from peace of mind across their finances. Meanwhile, the PRA and FCA fund the FSCS via a levy on regulated financial firms, showing the industry’s commitment to consumer safety.
Sam Woods, PRA chief executive and Bank of England deputy governor, said the increase helps maintain public confidence in savings.
According to PRA statements, the move strengthens trust in the UK’s financial system. Martyn Beauchamp, CEO of the FSCS, said consumers can feel confident their money is safe up to £120,000. Rocio Concha, Head of Policy at Which?, called the hike a “timely reminder” that growth support shouldn’t compromise consumer protection. Eric Leenders, managing director at UK Finance, said updating the limit to reflect inflation is the right approach. He also signalled industry efforts to inform customers about their rights.
From another viewpoint, these regulatory enhancements align with broader economic ambitions and digitalisation across UK banking. Nevertheless, while strong protections reassure customers, financial institutions must adapt quickly and provide clear guidance to ensure smooth transitions.
UK savers now enjoy faster, larger compensation for deposits, boosting their confidence and contributing to financial stability nationwide.
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