FSCS protection limit rise: what it means for you
The FSCS limit has increased to £120,000, boosting protection for savers and businesses. Discover why it matters, how it works, and how to safeguard larger cash balances effectively.
This article is not advice. If you would like to receive advice on your savings and investments, consider speaking to a Financial Adviser.
From 1 December 2025, the Financial Services Compensation Scheme (FSCS) protection limit increased by 41% from £85,000 to £120,000 (per client, per banking group). For joint accounts, protection rose from £170,000 to £240,000.
For anyone holding six-figure balances, this is welcome news. The higher limit provides a larger buffer if your bank, building society, or credit union fails.
An uplift driven by inflation
The Prudential Regulation Authority (PRA) is part of the Bank of England and is responsible for supervising financial institutions, like banks and building societies. It sets standards for how these firms operate and leads the process for updating the FSCS protection limit.
The protection limit had been capped at £85,000 since 2017. The PRA had originally proposed a rise to £110,000, but lifted this to £120,000 in light of ‘consultation feedback and to reflect the latest inflation data.’
This rise ensures that consumers can feel confident their money is safe, from the very first penny up to £120,000. This enhanced protection will reassure consumers and support confidence in the UK’s financial system.
By aligning the new limit with the rate of inflation, the PRA has reset the protection framework, so it reflects today’s economic environment.
Automatic protection for your cash
The new FSCS limit applies automatically. As long as your account is covered by the FSCS, you don’t need to take any action to receive the higher £120,000 protection. If your bank, building society, or credit union fails, the FSCS will normally return your money within seven days.
How do I know my money is fully protected?
Some banking groups operate several brands under one licence. When that happens, the FSCS treats them as a single institution. Your £120,000 protection limit then applies to your combined balance across the group.
The FSCS provides a simple tool that allows you to input your account and balance. Based on that, it then shows you how much of your money falls within the protection limit.
Why the protection limit rise matters
Katie Horne, savings expert at Flagstone, commented on the recent increase.
How it affects savers
‘Increasing the FSCS threshold to £120,000 is an important and welcome step to ensuring savers stay protected from market movements out of their control. This is particularly true in today's economy, where the value of the average person's or company's savings may be higher as a result of historically elevated interest rates and salary or earnings inflation.’
How it affects businesses
‘Businesses are the most at risk of losing money because they typically hold a lot more cash than the average individual. Industry data suggests that the average medium-sized businesses keep a lot more than £240,000 in one or two bank accounts, putting themselves and their employees' livelihoods at risk.’
Katie described wider behaviours across the market too:
‘The UK savings market is plagued by inertia. Record numbers of people still keep their cash in under-performing accounts and fail to correctly spread it between banks for safety. Until we break this paralysis, higher FSCS protection is a vital key to ensuring cash stays safe.’
Shield your savings
The limit increase strengthens the UK’s safety net. But protection still relies on spreading cash across UK-authorised financial institutions with separate banking licences.
That’s where Flagstone comes in. Our savings platform gives you access to hundreds of savings accounts from 65+ banks – letting you diversify your deposits to maximise FSCS protection. All in one platform, with one password.
Use our interest calculator to see how you could protect and grow your cash.
