The Bank Deposit FSCS Protection is reportedly set to increase to  £110,000 in the UK.

UK savers are set to receive increased protection for their deposits as proposed changes to banking rules aim to raise the protected amount in case of bank or building society failures.

The Prudential Regulation Authority (PRA) has announced plans to increase the FSCS deposit protection limit, taking into account inflation since the last update in 2017.

Proposed Increase to £110,000 Protection Limit

Currently, the Financial Services Compensation Scheme (FSCS) protects up to £85,000 per person per financial institution.

Under the new proposal, this limit will rise to £110,000. For joint accounts, the protected amount will increase to £220,000.

This change, subject to a consultation, is expected to take effect from 1 December 2025.

Read the Bank of England press release.

Read about the proposed changes to Inheritance Tax

Why the FSCS Increase?

The PRA’s decision reflects the need to adjust the protection limit in line with inflation, ensuring savers’ money remains adequately safeguarded. Advisers have hailed the move as “great news for savers and for confidence in our banking system.”

Spreading Savings for Maximum FSCS Protection

Savers with deposits exceeding the protected limit are advised to diversify their funds across multiple banks or building societies to ensure full coverage under the FSCS. Over its 25-year history, the FSCS has paid out over £20 billion to depositors, notably during the 2008 financial crisis.

Temporary High Balance Claims to Increase

The consultation also proposes raising the limit for “temporary high balance claims” from £1 million to £1.4 million.

This covers situations such as house moves or insurance payouts, where individuals may temporarily hold large sums in their accounts.

Boosting Consumer Confidence and Economic Growth

Sam Woods, CEO of the PRA, emphasises that customer confidence is “an essential foundation for economic growth.” The government has urged regulatory bodies to revise strategies that support economic expansion.

Rocio Concha, Director of Policy and Advocacy at Which?, described the FSCS proposed increase as “a sensible decision,” highlighting the link between strong consumer protections and economic growth.

Key Takeaways:

  • Proposed increase of FSCS bank deposit protection to £110,000 per person.
  • Joint accounts are to be protected up to £220,000.
  • Temporary high balance claims limit to rise to £1.4 million.
  • Increase aims to reflect inflation and boost consumer confidence.
  • The effective date is expected to be 1 December 2025.