The protection limit available through the Financial Services Compensation Scheme (FSCS) for monies held with banks and building societies has increased from £85,000 to £120,000 as of 1st December 2025. At the same time, the Temporary High Balance (THB) protection limit has increased to £1.4 million, up from the previous limit of £1 million.
About the Financial Services Compensation Scheme
The Financial Services Compensation Scheme acts on behalf of consumers to protect their money held with banks and building societies in the UK against losses arising from the collapse or failure of a regulated financial institution. The FSCS provides its services and compensation for consumers free of charge thanks to the levies it charges the financial industry.
In 2024/25, the FSCS paid £327 million out to over 32,000 customers of failed firms. You can read more about the FSCS, how it works and how to make a claim in our article, “What is the Financial Services Compensation Scheme (FSCS)?”.
Changes to the FSCS compensation limits effective 1st December 2025
- FSCS protection for deposits and savings in bank, building society and credit union accounts has increased from £85,000 to £120,000.
- The compensation limit applies per person, per authorised firm, which may cover more than one financial institution.
- The protection limit for temporary high balances has increased from £1 million to £1.4 million for a period of up to six months. This provides greater coverage for significant life events, such as selling a home or receiving an inheritance.
What will the raised compensation limit mean for savers?
The raised protection limit will be reassuring for consumers with larger deposits, providing peace of mind that up to £120,000 of their funds will be protected against failures beyond their control. While this may mean there is less need to spread funds across multiple banks for security, savers must still be careful. It is vital to check if your providers share a banking licence, as this can reduce the total protection available to you.
Beyond security, consumers should also prioritise maximising returns on their deposits. To find the highest interest rates currently available in the market, check out our article, "Best savings accounts in the UK" where we regularly update the top choices in the market.
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