FSCS Protection Is Increasing to £120,000: What It Means for Your Savings

From December 1, 2025, your savings will get a bigger safety cushion. The FSCS deposit protection limit on eligible cash accounts will rise from £85,000 to £120,000 per person, per bank.

If a bank, building society, or credit union covered by the FSCS ever failed, your money in protected accounts, such as Cash ISAs, Lifetime Cash ISAs, easy access savings, and notice accounts like a 95-day pocket, would be covered up to £120,000 with that bank.

You do not have to sign up or tick any boxes. The change happens automatically, in the background.

In this guide, you will see what the FSCS is in simple terms, how the new £120,000 limit works, and what to think about if your savings may go over that amount with one bank.

What the FSCS Is and How It Protects Your Money

Imagine you put your money in a savings pot and lock the lid, expecting it to sit there safely until you need it. Most of the time, that is exactly what happens. But what if the company holding your pot goes out of business?

That is where the Financial Services Compensation Scheme (FSCS) comes in.

The FSCS is a safety system for your money in the UK. It steps in if a bank, building society, or credit union that is covered by the scheme fails and cannot give you your money back. You do not pay for it directly. It is funded by financial firms, and it is backed by laws set by the UK government.

You can think of it as emergency backup. You put your savings into a UK-authorized bank. If that bank later closes and cannot pay savers, the FSCS uses its own funds to repay customers up to the set limit per person with that firm.

The scheme covers most everyday bank accounts, as long as the provider is authorized in the UK and included in the FSCS. It is not a way to boost interest. It is there to protect your cash if the worst happens.

FSCS protection sits quietly in the background while you go about your life. You do not need a special card, code, or form. If something goes wrong, the FSCS talks to the failed bank, checks records, then pays customers what they are owed within the limits.

So when you see the FSCS logo next to an account, you are seeing a promise that even if the bank disappears, your protected savings should not.

FSCS in Plain English: A Safety Net for Savers

Think of walking across a high wire. Would you feel better if there was a strong safety net stretched below you?

The FSCS is that net, but for your savings.

If a UK-authorized bank or building society fails and cannot pay you, the FSCS steps in. It checks how much money you had with that firm across your covered accounts, then pays you back up to the protection limit.

Payouts are usually made within a few days, not months or years. The aim is to get money back into your hands as quickly as possible so your day-to-day life is not turned upside down.

Here is a simple example. Say you have £30,000 in a savings account with a small UK bank. The bank gets into serious trouble and closes. You cannot log in, and the website has a notice saying the bank is no longer trading. Rather than your money vanishing, the FSCS steps in, checks the bank’s records, and pays you your £30,000 back into another account in your name, as long as you fall within the limit.

You do not need to chase the bank or stand in a long line. The safety net is already in place.

Which Accounts and Providers Are Usually Covered

For everyday banking, FSCS protection normally covers:

Current accounts: Your main bank account used for income and bills.
Standard savings accounts: Simple savings pots with a UK bank or building society.
Cash ISAs: Tax-free cash savings with an FSCS-covered provider.
Lifetime Cash ISAs: The cash part held with an FSCS-protected bank or building society.
Easy access pockets or spaces: App-based savings pots that sit under a protected bank.
Notice accounts, such as a 95-day notice pocket: Where you agree to give notice before withdrawing.

Protection applies to banks, building societies, and credit unions that are UK-authorized and part of the FSCS. You can usually spot this in the small print on their website or app, often shown as the FSCS badge or a clear sentence saying deposits are protected.

Not all investments are covered in the same way. Shares, funds, and investment platforms follow different rules, so always check the details for those.

What the New £120,000 FSCS Limit Means for Your Savings

From December 1, 2025, the standard FSCS deposit limit will rise from £85,000 to £120,000 per person, per authorized firm. This change reflects higher living costs and gives you more space to keep savings fully protected with each bank.

The key idea is that the limit is per person, per bank group that shares a single banking license. If you have several accounts with the same firm, they are all added together for the FSCS calculation.

So if you keep your checking, savings, and ISA with one big high street bank, the FSCS looks at the total of all those balances with that bank, not each one on its own.

This higher limit helps many savers who hold bigger emergency funds, house deposits, or business cash. It means more of your money is now inside the safety net with each covered provider.

From £85,000 to £120,000: How the New FSCS Limit Works

From December 1, 2025:

The FSCS limit for deposits becomes £120,000 per person, per authorized firm.
The limit applies across all protected accounts you hold with that firm.

It is easier to see with round number examples.

Example 1: Fully covered
You have with the same bank:

£60,000 in a savings account
£50,000 in a Cash ISA

Your total with that bank is £110,000. This sits under the £120,000 limit, so it is all protected.

Example 2: Partially covered
You have with the same bank:

£100,000 in a current account
£50,000 in an easy access pocket

Your total with that bank is £150,000. FSCS protection covers £120,000. The extra £30,000 would not be covered if that bank failed.

The limit is per person. So two people with a joint account can each get protection. A joint balance of £200,000 with one bank, for example, would be treated as £100,000 each for FSCS purposes, both under the £120,000 limit.

How the Limit Works with Cash ISAs, Lifetime ISAs, and Savings Pockets

Banks often let you split money into several pots in the same app. For FSCS, that does not mean separate protection.

If you hold with one provider:

A Cash ISA
A Lifetime Cash ISA
An Easy Access Pocket
A 95-day notice pocket

FSCS adds all these balances together under that single banking license. It then checks whether your total is up to, or above, £120,000.

For example, say you hold:

£70,000 in a Cash ISA
£40,000 in an Easy Access Pocket

Your total with that provider is £110,000. If the bank is covered by FSCS, that full amount is protected because it is under £120,000.

The pots look separate in your app, but for FSCS they are all just part of one total.

Temporary High Balances: Short-Term Protection for Large Amounts

Sometimes you may have a lot more money in your account for a short time. You might sell your home, receive an inheritance, or get a large insurance payout. In those cases, the standard £120,000 limit might not feel enough.

The FSCS has a rule for temporary high balances. From December 1, 2025, certain life events can give you protection for much larger sums, up to around £1.4 million, for up to 6 months with one bank.

Chapter 1: What Exactly Is Changing on 1 December 2025?

From 1 December 2025, FSCS protection for deposits in UK-regulated banks, building societies, and credit unions will increase:

Old Limit: £85,000

New Limit: £120,000

This applies per person, per authorised bank, or £240,000 for joint accounts.

So if the bank you use ever failed (which is extremely rare), the FSCS would refund you up to £120,000 automatically.

Here’s what’s included:

✔ Eligible FSCS-protected accounts

Cash ISA
Lifetime Cash ISA
Easy Access savings
Fixed-rate savings
95-day notice savings
Current accounts
Joint accounts
Children’s savings accounts
Building society accounts
Credit union accounts

✔ Includes digital banks (if FSCS-regulated)

This covers providers like:

Monzo
Starling
Chase UK
Revolut (if regulated at the time)
Cash ISA platforms holding money with partner banks

✔ No action required

Your money is automatically protected at the new limit. You don’t need to switch, sign forms, or update anything.

Chapter 2: Why Is the Limit Increasing?

There are three reasons:

1. Inflation and the cost of living

As the value of money changes, protection limits need to rise so they remain meaningful.

£85,000 in 2010 covers far less today.
£120,000 restores the “real value” of protection.

2. Growth in average UK savings

More people are saving larger amounts, especially through ISAs and notice accounts. The new limit ensures higher savers feel safer.

3. Market stability

Increasing the protection makes the entire banking system more resilient.
If people know their savings are safe, they’re less likely to panic during financial uncertainty.

Chapter 3: How the FSCS Actually Works (Friendly Explanation)

Think of the FSCS as your financial safety net. If a bank goes bust, you won’t lose your savings — the FSCS steps in to refund you.

The FSCS is:

Free
Automatic
Government-backed
Funded by the financial services industry (not taxpayers)
Designed to protect consumers, not banks

Let’s break it down even more simply.

How FSCS Protection Works — Step by Step

Step 1: A bank fails

This is extremely rare in the UK, but if it did happen, the bank stops trading.

Step 2: The FSCS checks who had money there

Their systems show your balance at the time of the failure.

Step 3: They refund you automatically

You don’t apply.
You don’t need paperwork.
The FSCS pays out usually within 7 days.

Step 4: Money lands in your new or nominated bank account

You can choose where to receive the compensation, or the FSCS will contact you if they need details.

Chapter 4: What Counts as “Per Bank”? Understanding the Authorised Bank Rule

This part confuses many people, but it’s important.

FSCS protection is based on the banking licence, not the brand name.

Example: HSBC Group

HSBC
First Direct
M&S Bank (historically)
All operate under one banking licence.
So the £120,000 limit applies to all of them combined.

Example: Lloyds Banking Group

Lloyds
Halifax
Bank of Scotland

Also one licence.

Meanwhile, these are separate licences:

Monzo
Starling
Chase
Virgin Money
Nationwide
NatWest
Barclays
Each gets its own £120,000 protection limit.

Chapter 5: Real-Life Examples — How the New FSCS Limit Protects You

Example 1: A single saver with £100,000 in a Cash ISA

Old limit: £85,000 → £15,000 unprotected
New limit: £120,000 → Fully protected

Example 2: Joint account with £200,000 at Santander

Each person is protected up to £120,000
→ Joint protection: £240,000
→ Full amount protected

Example 3: Someone with £90k in Lloyds and £90k in Nationwide

FSCS protection applies per bank licence, so:
Lloyds → £90k protected
Nationwide → £90k protected
Total protected: £180,000

Example 4: £160k split across Monzo (£80k) and Starling (£80k)

Both accounts remain fully protected under the new limit.

Chapter 6: How To Organise Your Savings Smartly Under the New Limit

The new £120,000 limit gives more flexibility, but it's still wise to spread money if you have savings above that amount.

✔ Tip 1: Use separate banking licences

Monzo + Starling + Chase + Nationwide =
£120k × 4 = £480k fully protected

✔ Tip 2: Check licences before opening an account

Search the bank name + “FSCS licence”.

✔ Tip 3: Use ISAs wisely

Cash ISAs and Lifetime Cash ISAs are all covered under the same bank licence.

✔ Tip 4: Combine FSCS with other protections

Premium Bonds → Protected by HM Treasury
Investment ISAs → Covered by FSCS up to £85k for investment firms

✔ Tip 5: Spread money if you’re close to the limit

If you hit £115k–£120k, open a new account with a different bank.

Chapter 7: What’s NOT Covered by FSCS? (Important)

FSCS does not protect everything.

❌ Not covered

Cryptocurrencies
Money held in fintech apps that are not banks
E-money wallets (e.g., prepaid cards)
Cash held in investment platforms (unless deposited with a partner bank)
Money held with overseas-only banks
Investments losing value
Gift cards or store credit

✔ Covered

Savings accounts
Current accounts
ISAs
Joint accounts
Notice accounts
Building societies
Credit unions

Before opening an account, check for FSCS logo or the bank’s official licence.

Chapter 8: Why FSCS Matters More Than Ever in 2025

The UK’s financial landscape is changing:

More people are saving due to higher interest rates
More digital banks are emerging
More fintechs hold customer money
Economic uncertainty makes consumers cautious

The £120,000 upgrade strengthens confidence and helps protect everyday people, families, small businesses, and long-term savers.

When people know their money is safe, they’re more likely to save, invest, and build generational wealth.

Chapter 9: FSCS Protection for Different Types of Accounts

1. Cash ISA & Lifetime ISA

Both protected up to £120,000 per bank.

2. Notice Savings (95-Day)

Still fully covered.

3. Easy Access Savings

Protected as long as they are with an FSCS-regulated bank.

4. Children’s savings

Protected under the child’s name.

5. Business accounts

Small businesses are covered too.

6. Homes under probate

Protected for up to £1 million for up to 6 months, if the funds relate to property sales or insurance payouts.

Chapter 10: How to Check if Your Bank Is FSCS Protected

✔ Method 1: Look for the FSCS badge on their website

Use official bank sites only.

✔ Method 2: Check the FCA Register

Search the name to confirm the bank’s status.

✔ Method 3: Check the FSCS website “Protected or Not?” tool

If a bank does not appear here, your money may not be protected.

Chapter 11: What Happens If a Bank Fails? A Friendly Walkthrough

Here’s what typically happens:

Bank is closed by regulators
FSCS steps in
They verify your balance
You’re paid automatically
Compensation arrives within a week
You can choose a new bank to move your money to

The process is smooth and fast because FSCS has modern systems designed for quick payouts.

Chapter 12: Should You Move Your Money Before December 2025?

No — unless you have more than £85,000 in a single bank before the new limit starts.

If you already exceed £85k and want to be extra secure before 1 December 2025, you could consider splitting your savings temporarily.

But from 1 December 2025 onwards, up to £120,000 per bank is protected, so many people will reduce the number of accounts they use.

FAQs — Simple Answers to Common Questions

1. Do I need to do anything to get the new £120,000 protection?

No. It applies automatically.

2. When does it start?

1 December 2025.

3. Are Cash ISAs protected?

Yes — up to £120,000 per bank.

4. Are Lifetime Cash ISAs protected?

Yes.

5. Are digital banks like Monzo and Starling covered?

Yes — they are UK-regulated banks.

6. What about Revolut?

Only if Revolut operates under a UK banking licence at the time.
Check the FSCS website for updates.

7. Are joint accounts protected up to £240,000?

Yes.

8. What if I have more than £120,000?

Spread the money across banks with different licences.

9. Are businesses covered?

Yes — most small businesses qualify.

10. Do I get my money back instantly if a bank fails?

Usually within 7 days.

Conclusion: Your Savings Just Became Safer

The increase of FSCS protection from £85,000 to £120,000 is a major win for UK savers. It gives real peace of mind, encourages smarter saving, and strengthens financial stability across the country.

You don’t need to change anything, switch accounts, or sign up for anything new.
Just enjoy the increased protection — and organise your money wisely to get the most out of it.