The maximum amount of savings protected if a UK bank or building society fails will increase from £85,000 to £120,000 from 1 December 2025 – the first uplift in almost ten years.
The Bank of England has confirmed that the Financial Services Compensation Scheme (FSCS) will raise its existing limit by around one-third. This protection applies per individual, per authorised institution, meaning all accounts someone holds with the same regulated bank or building society are counted together when assessing the limit.
The Prudential Regulation Authority (PRA) reminded savers that anyone with balances above the current threshold should consider spreading their money across multiple PRA-authorised providers if they want full protection.
Alongside the main increase, the cap for temporary high balances – which covers larger sums held for a short period due to major life events, such as a house purchase or receiving certain insurance payouts – will rise from £1 million to £1.4 million.
According to the regulator, the adjustments are being made to keep pace with inflation. The FSCS limit has not changed since 2017, when it was increased to £85,000 from £75,000 the previous year. For comparison, during the 2008 financial crisis, protection stood at £33,000.
Martyn Beauchamp, chief executive of the FSCS, said the higher limit would give consumers greater confidence: “This increase means people can be sure their savings are secure, from the first pound up to £120,000. Trust in the financial system is essential, and this additional protection helps strengthen that confidence.”
Banks and building societies will have until the end of May 2026 to update all customer-facing information, including in-branch posters, leaflets and mandatory disclosure sheets.
Eric Leenders, UK Finance’s managing director of personal finance, welcomed the update, noting that the previous threshold was set eight years ago: “It makes sense to revisit the limit to reflect inflation. We will support our members in putting these changes into practice and in ensuring customers understand what FSCS cover means for them.”
