FSCS Limit Increase 2026: What Changed When Protection Rose to £120,000

What changed on 1 December 2025

On 1 December 2025, the Financial Services Compensation Scheme (FSCS) deposit protection limit increased from £85,000 to £120,000 per person, per authorised firm. This was the first change to the deposit limit since 2017. The higher protection applied automatically, with no action needed by savers.

The change means that if a bank, building society or credit union authorised by the Prudential Regulation Authority (PRA) fails, eligible deposits held with that firm are now protected up to £120,000. The previous limit of £85,000 had been in place since 2017. The new limit applies to firm failures occurring on or after 1 December 2025, so any failure before that date remains subject to the old threshold.

For the vast majority of savers, the increase provides an additional layer of security without any administrative steps. The FSCS confirmed that the higher protection was applied automatically from the effective date, and no claims or registrations were required to benefit from it.

Why the limit went up

The Prudential Regulation Authority reviewed the deposit protection limit and confirmed the increase in November 2025, following a consultation launched in March 2025. The rise reflects inflation since the limit was last set in 2017. The PRA had proposed £110,000 but settled on £120,000 after consultation feedback.

The PRA’s review considered how the real value of the £85,000 limit had eroded over time. Since 2017, cumulative inflation had reduced the purchasing power of the protected amount, meaning savers were effectively receiving less protection in real terms. The PRA’s initial proposal of £110,000 was revised upwards to £120,000 following responses to the consultation, which argued for a higher figure to better reflect the impact of inflation.

The Bank of England, of which the PRA is a part, stated that the new limit aims to maintain the credibility of the deposit protection framework while balancing the costs to the industry. The increase was designed to keep the UK in line with international norms and to ensure that the vast majority of depositors remain fully protected in the event of a firm failure.

What else changed at the same time

Joint account protection rose in line with the new limit, to a combined £240,000 per firm. The temporary high balance limit also increased, from £1 million to £1.4 million, on the same date. These changes apply to firm failures occurring on or after 1 December 2025.

For joint accounts, the protection limit is now £240,000 per authorised firm, reflecting the doubling of the single account limit. This means that two account holders with a joint account can be protected up to a combined total of £240,000, rather than the previous £170,000.

The temporary high balance limit, which provides additional protection for certain life events such as the sale of a property or receipt of a redundancy payment, was increased from £1 million to £1.4 million. This higher limit applies for a six-month period from when the funds are first deposited, and is designed to cover situations where a saver temporarily holds a large sum that exceeds the standard limit.

It is important to note that the FSCS investment protection limit was not changed and remains at £85,000 per person, per firm. This applies to investments such as stocks and shares, and is separate from the deposit protection limit.

Why you might still see 85,000 pounds

Firms have until 31 May 2026 to update their disclosure materials, so some bank websites, leaflets and statements may still display the old £85,000 figure. The higher £120,000 limit applies regardless of what older materials say.

The PRA has given authorised firms a transition period to update their customer communications, including terms and conditions, website pages, and printed materials. As a result, savers may encounter the old £85,000 figure on some documents or online pages until the end of May 2026.

This does not affect the actual level of protection. The FSCS has confirmed that the £120,000 limit is effective from 1 December 2025, and any firm failure on or after that date will be covered under the new threshold. Savers who see outdated figures should not be concerned, as the legal protection is determined by the date of the firm’s failure, not by the information displayed in marketing materials.

What savers should do now

No action is required; the higher limit is automatic. Those with more than £120,000 at one firm may wish to review how it is spread. For the full current limits and how to spread savings, see the FSCS protection limit guide.

The increase to £120,000 means that most savers will not need to make any changes to their banking arrangements. The protection is applied automatically, and there is no need to register or apply for the higher limit.

For individuals or couples with savings exceeding the new threshold at a single firm, it may be worth reviewing how those funds are distributed. Spreading deposits across multiple authorised firms can ensure that each account is protected up to the full limit. Joint account holders can also benefit from the combined £240,000 limit.

The table below summarises the key changes to the FSCS deposit protection limits that took effect on 1 December 2025.

Savers who are unsure about their total exposure at any one firm can use the FSCS’s online protection checker to calculate their coverage. The scheme also provides guidance on how to structure savings to maximise protection under the new limits.

Frequently asked questions

When did the FSCS limit increase?

The FSCS deposit protection limit increased on 1 December 2025, rising from 85,000 pounds to 120,000 pounds per person, per authorised firm.

Why did the FSCS limit go up?

The Prudential Regulation Authority raised the limit to reflect inflation since it was last set at 85,000 pounds in 2017.

Did the joint and temporary limits change too?

Yes. Joint account protection rose to 240,000 pounds, and the temporary high balance limit increased from 1 million pounds to 1.4 million pounds.

Do I need to do anything?

No. The higher 120,000 pounds protection applied automatically from 1 December 2025, so savers do not need to take any action.

Why does my bank still say 85,000 pounds?

Firms have until 31 May 2026 to update their disclosure materials, but the higher 120,000 pounds limit applies regardless of what the materials currently state.