UK banking protection to increase to £120,000 from 1st December - 18th November 2025

The Prudential Regulation Authority (PRA) has confirmed that the deposit protection limit provided by the Financial Services Compensation Scheme (FSCS) for banks, building societies and credit unions in the UK will increase from £85,000 to £120,000 with effective 1 December 2025.  In addition, the “temporary high balance” protection (for major life-event deposits such as from home sales or inheritances) will rise from £1 million to £1.4 million. 

Why the change

The current limit of £85,000 has been in place since 2017 and has not been uprated to fully account for inflation. The PRA reviewed the limit (as required under the Deposit Guarantee Scheme Regulations) and proposed an increase earlier in 2025 (initially to £110,000) but, following consultation and updated inflation data, opted for £120,000. The change is intended to help maintain public confidence in the banking system and protect savers’ money. 

 What it means for savers

From 1 December 2025, if a UK-authorised bank, building society or credit union fails, an individual depositor can claim up to £120,000 compensation under the FSCS for deposits held with that firm. For joint accounts, the rules generally treat each eligible person separately - but care must be taken where accounts are held under the same banking licence or group. Protection is per authorised firm, not per account. If you hold accounts across multiple brands that share the same banking licence then your total deposits may be aggregated for the purpose of the limit. 

For “temporary high balances” (e.g., large sums held for a limited time after life-events), the cover rises to up to £1.4 million (protected for up to six months) from 1 December. 

You generally do not need to take any action to benefit from the new limit, it will apply automatically for eligible deposits from that date onward. 

This is a significant uplift in the protection for UK savers, moving from £85k to £120k means more of your money can be safeguarded in the event of a bank failure. While some savers may not reach these limits, the change is reassuring for those with larger balances or planning major transactions.