Deposit protection limit to rise to £120,000 from December

The new limit – up from £85,000, where it has stood since 2017 – will apply under the Financial Services Compensation Scheme from 1 December. It means that up to £120,000 of an individual’s money will be safeguarded if their UK-authorised bank, building society or credit union collapses. The figure exceeds the PRA’s earlier proposal of £110,000, revised after consultation.

The limit applies per person, per authorised firm. According to the FSCS, customers will usually receive their money within seven days of a failure. No action is required for the new limit to take effect.

Some providers operate multiple brands under a single banking licence, and consumers are advised to check whether their accounts fall under the same authorised firm. Where several accounts sit within the same banking group and share a licence, the compensation cap applies to the total balance across them.

Sam Woods, deputy governor for prudential regulation at the Bank of England and chief executive of the PRA, said: “This change will help maintain the public’s confidence in the safety of their money.

“It means that depositors will be protected up to £120,000 should their bank, building society or credit union fail. Public confidence supports the strength of our financial system.”

Martyn Beauchamp, chief executive of the FSCS, said: “We welcome the announcement from the Prudential Regulation Authority confirming that the FSCS deposit protection limit will increase.

“This rise ensures that consumers can feel confident their money is safe.”