FSCS protection is the compensation the Financial Services Compensation Scheme provides if a UK-authorised financial firm fails. It covers eligible deposits, investments, pensions and insurance up to set limits, so customers can recover money when a regulated provider collapses.
In one line: FSCS protection is statutory compensation that repays customers, up to set limits, when an authorised UK financial firm fails.
How FSCS protection works
The FSCS is the UK's statutory compensation scheme, funded by industry levies and backing FCA and PRA authorised firms. Eligible deposits are protected up to 110,000 GBP per person per banking licence for firms failing on or after 1 December 2025 (FSCS).
For example, a saver holding 100,000 GBP at a failed authorised bank would have the full amount covered, while someone holding 150,000 GBP at one licence could recover 110,000 GBP, leaving 40,000 GBP unprotected.
Investments and SIPP-held pensions have a separate limit of 85,000 GBP per person per firm (FSCS), so the protection that applies depends on the product and how the firm is authorised.
FSCS protection vs the deposit limit per licence
FSCS protection is the overall safety net across deposits, investments, pensions and insurance. The 110,000 GBP deposit limit applies per banking licence, not per account, so several brands sharing one licence share one limit.
Spreading savings across separate licences keeps more of a large balance within the protected threshold.
Primary source: Financial Services Compensation Scheme (FSCS)