UK savers will see stronger protection for cash held with banks, building societies and credit unions after the deposit guarantee limit is increased from £85,000 to £120,000 per person, per institution from 1 December 2025. The change has been confirmed by the Bank of England’s Prudential Regulation Authority (PRA) and is the first rise since 2017.
The Financial Services Compensation Scheme (FSCS) covers eligible deposits if a regulated firm fails. Under the new rules, joint accounts will be protected up to £240,000 in total. The PRA has also confirmed a higher cap for temporary high balances, for example, money from a house sale, inheritance or insurance payout, rising from £1m to £1.4m for up to six months.
The increase aims to maintain the real value of protection after several years of high inflation and to support confidence in the banking system. Other FSCS limits for investments and insurance products remain unchanged.
The practical message is that cash savings above £85,000 may no longer need to be spread across as many providers, although the limit still applies per banking group, not per brand. Those with large one-off receipts should also benefit from the higher temporary cover, provided the money is held with an FSCS-protected institution and the scheme’s eligibility rules are met.
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