Financial Services Compensation Scheme (FSCS) Protection Limit Increases to £120,000

The Prudential Regulatory Authority (PRA) has announced that, from 1 December 2025:

• The standard deposit protection limit, which applies to the Financial Services Compensation Scheme (FSCS), will rise from £85,000 to £120,000, a 41.2% increase.

• The temporary high balance (THB) limit, which provides a higher protection level for a period of six months from the point of deposit for certain qualifying life events, such as residential property transactions or insurance payouts, will rise from £1 million to £1.4 million. 

The £120,000 limit is £10,000 higher than proposed in the PRA’s March 2025 consultation. The PRA says that the higher figure reflects “the latest inflation data”. For the record, the £85,000 limit was (re)introduced in January 2017, since when prices have risen by 37.4% (based on the September 2025 CPI). The THB limit was set in July 2015, since when prices have risen by 39.3%.

The is one quirk which the PRA was quiet about. The FSCS limit was also at £85,000 between December 2010 and December 2015, a period when its level was set relative to the EU limit of €100,000. If the limit were to be revalued from December 2010, it would now be around £130,000. 

Banks, building societies and other deposit takers have until the end of May 2026 to update their literature. 

Remember the FSCS limit is per customer, per financial institution. That means that there is only one tranche of cover for banks which share a banking license (e.g. Bank of Scotland and Halifax). This means that FSCS cover for joint accounts will be £240,000 from 1 December.