Bank Deposit Protection Increased to £120k
8th January 2026
With effect from 1 December 2025 the Financial Services Compensation Scheme (FSCS) deposit protection limit increased from £85,000 to £120,000. This is the first increase since 2017.
Savers, both individuals and companies, will now have more protection if their bank, building society, or credit union collapses, as the Bank of England effectively underwrites lost deposits up to £120,000.
Ever since the 2008 financial crisis, the possibility of a UK bank going bust has been perceived to increase. For clients who wish to actively mitigate this risk, it has become best practice to therefore spread their surplus cash deposits across more than one bank, to take advantage of as many of these protection caps as possible. The protection is provided for any accounts held at a single institution authorised by the Prudential Regulation Authority. Banks within the same group (e.g. Natwest & RBS) only offer 1 protection cap, so be careful.
Cash deposits held within active saver platforms, are entitled to more than one cap if the individual deposits within the platform are with unconnected banks.
Disclaimer - All information in this post was correct at time of writing.
