When a UK bank or financial firm goes out of business, you might worry about losing your money.
The Financial Services Compensation Scheme protects your deposits and other financial products if your provider fails.
If your UK-authorised bank, building society, or credit union fails after 1 December 2025, the FSCS automatically compensates you up to £120,000 per eligible person, per institution.
The FSCS is triggered when a financial services firm enters insolvency, such as administration or liquidation.
You don’t need to file a claim for most bank deposits.
The scheme handles compensation automatically and contacts you directly.
This guide explains the deposit limits, which accounts are covered, and how to maximise your protection across multiple institutions.
Key Takeaways
- The FSCS protects up to £120,000 per person per bank if your financial institution fails after 1 December 2025.
- Compensation is paid automatically for bank deposits without requiring you to submit a claim.
- Different protection limits apply to investments, pensions, and insurance products depending on when the firm failed.
Understanding the FSCS and Regulatory Oversight
The Financial Services Compensation Scheme operates as the UK’s safety net for consumers when financial firms fail.
It has oversight from two key regulatory bodies.
The scheme protects deposits up to £120,000 per person per institution.
The Financial Conduct Authority and Prudential Regulation Authority ensure firms meet required standards.
What Is the Financial Services Compensation Scheme?
The FSCS is an independent organisation that protects your money when authorised financial services firms go out of business.
The scheme covers various financial products including bank deposits, insurance policies, investments, and certain pension products.
When a regulated firm fails and cannot pay claims against it, FSCS steps in to compensate you.
The compensation limits vary by product type, but for deposits, you’re protected up to £120,000 per person per authorised firm.
The FSCS has its own board of directors, making it an independent entity.
The protection only applies to firms authorised by UK regulators, so you need to check whether your provider is covered before assuming protection applies.
Role of the FCA and PRA
The Financial Conduct Authority regulates the behaviour of financial services firms and protects consumers.
It aims to ensure financial markets work properly so you get a fair deal.
The Prudential Regulation Authority, part of the Bank of England, regulates and supervises major banks, building societies, credit unions, insurers, and investment firms.
Both the FCA and PRA oversee the FSCS’s operation and make the rules that relate to the scheme.
The FCA focuses on how firms treat customers, whilst the PRA concentrates on firms’ financial strength and stability.
FSCS Funding and Operation
The Financial Services Compensation Scheme is funded by the financial services industry, not the government or taxpayers.
Authorised firms pay levies to fund the scheme’s operations and compensation payments.
The service is completely free for you to use.
When you make a claim, FSCS assesses whether the failed firm owes you money and whether your claim falls within the protection limits.
If approved, you receive compensation directly from the scheme.
How FSCS Protection Works in the UK
The FSCS steps in when authorised financial firms fail and cannot pay what they owe customers.
The process involves specific triggers that activate protection, a structured claims procedure, and defined payment methods to ensure you receive compensation quickly.
What Triggers FSCS Compensation
FSCS compensation is triggered when a financial services firm enters an insolvency process like administration or liquidation.
This means the company no longer has enough money to pay its debts.
The firm must be authorised by the Financial Conduct Authority for you to claim.
Once a firm fails, the FSCS publishes information about the company and what customers need to do on its website.
Protection applies to various financial products including savings accounts, current accounts, investments, insurance policies, and pensions.
The firm’s failure must prevent it from meeting valid claims against it.
The FSCS Claims Process
You can start your FSCS claim directly through the FSCS website once your financial firm has been declared failed.
The service is free to use, and you keep 100% of the compensation owed when you claim directly.
The FSCS will ask you to provide details about your account or product and the amount you held with the failed firm.
You may need to submit supporting documents like account statements or policy documents.
Claims are assessed to determine eligibility and the compensation amount based on protection limits.
The FSCS contacts eligible customers directly when possible, but you can also initiate a claim yourself.
How Compensation Is Paid Out
The FSCS pays compensation directly to you, typically through bank transfer to your nominated account.
For savings and current accounts, you’re protected up to £120,000 per eligible person with UK-authorised banks, building societies, and credit unions.
Payment timings vary depending on the complexity of your claim and the failed firm’s records.
Simple savings claims often get processed faster than investment or pension claims.
In certain qualifying situations, the FSCS protects temporary high balances up to £1.4 million.
These special circumstances include property sale proceeds, inheritance payments, and redundancy payments held temporarily in your account.
Deposit Protection Scheme and FSCS Limits
The FSCS deposit protection limit increased from £85,000 to £120,000 on 1 December 2025.
This provides stronger safeguards for your savings across current accounts, savings accounts, and other eligible deposits held with UK-authorised banks and building societies.
Deposit Protection Limits and Calculation
The deposit protection scheme protects up to £120,000 per person per banking licence.
This means you receive protection for the total amount you hold across all your accounts with the same bank or banking group, not per individual account.
If you hold £50,000 in a current account and £80,000 in a savings account with the same bank, your total protected amount is £120,000.
The remaining £10,000 would not be covered if the bank failed.
Protection applies differently based on account type:
- Individual accounts: £120,000 total per person per bank
- Sole trader accounts: £120,000 total across personal and business accounts
- Limited companies: £120,000 for the business, plus separate £120,000 for your personal accounts
You don’t need to live in the UK to receive FSCS protection, but your bank must be authorised by the Prudential Regulation Authority.
Joint Accounts and Multiple Brands
Joint accounts receive protection for each account holder separately.
If you hold a joint savings account with one other person, you each get up to £120,000 of protection, giving the account total coverage of £240,000.
This protection extends across all accounts you hold within the same banking group.
Major banks often own multiple brands that operate under a single banking licence.
For example, HSBC owns First Direct and Marks & Spencer Bank, so your protection limit is £120,000 across all three brands combined, not £120,000 at each one.
You should check which brands share the same banking licence to avoid accidentally exceeding your protection limits when spreading money across different accounts.
Temporary High Balances
The FSCS provides additional protection for temporary high balances that exceed the standard £120,000 limit in specific circumstances.
This covers money from life events such as property sales, inheritances, insurance payouts, or compensation for personal injury.
Protection for temporary high balances lasts for six months from when the money enters your account.
The FSCS limit for these balances increased alongside the standard limit when it rose to £120,000.
Claims involving temporary high balances can take up to three months to process, compared to seven working days for standard claims.
Banking Licences and Eligible Deposits
Your money must be held with a UK-authorised deposit taker for FSCS protection to apply.
The bank or building society needs authorisation from the Prudential Regulation Authority.
Protection is triggered when a firm enters insolvency.
Eligible deposits include:
- Current accounts
- Savings accounts
- Cash ISAs
- Fixed-term bonds
The FSCS automatically pays compensation within seven working days in most cases.
You don’t need to submit a claim yourself, as the scheme identifies eligible depositors and processes payments directly.
Money held in accounts where the beneficial owner isn’t immediately clear, such as trust arrangements, may take longer to process.
Types of Accounts and FSCS Coverage
Different types of accounts receive varying levels of FSCS protection.
Deposit protection covers up to £120,000 per person per institution for banks and building societies that failed after 30 November 2025.
Investment products, pensions, and e-money accounts follow separate compensation rules.
Savings and Current Accounts
Your savings and current accounts held with UK-authorised banks, building societies, or credit unions receive automatic FSCS protection.
You’re covered up to £120,000 per eligible person per institution for firms that failed after 30 November 2025.
Joint accounts are also protected up to £120,000 per eligible person, not per account.
This means a joint account shared by two people receives up to £240,000 of total protection.
Temporary high balances receive enhanced protection up to £1.4 million for six months.
This covers specific life events like receiving proceeds from a house sale, inheritance, or insurance payout.
If your bank fails, you don’t need to submit a claim.
The FSCS will automatically compensate you within seven days of the bank’s failure.
Cash ISAs and Stocks & Shares ISAs
A cash ISA receives the same protection as standard savings accounts because it’s classified as a deposit product.
Your cash ISA counts towards your £120,000 limit per institution.
Stocks & shares ISAs follow different rules.
If your investment provider fails, you’re protected up to £85,000 per person per firm for failures after 1 April 2019.
This covers situations where your provider goes bust, not losses from poor investment performance.
Key differences include:
- Cash ISAs = deposit protection (£120,000)
- Stocks & shares ISAs = investment protection (£85,000)
- Protection covers firm failure only, not investment losses
You need to check which banking licence covers your cash ISA, as multiple brands often operate under one licence.
SIPPs and Pension Accounts
Pension protection varies based on what goes wrong.
If your pension provider fails, you receive 100% compensation with no upper limit for failures after 1 April 2019.
SIPP operators receive different treatment than pension providers.
If your SIPP operator fails, you’re covered up to £85,000 per person per firm.
Bad pension advice claims also receive up to £85,000 compensation per person per firm.
This applies when you’ve received unsuitable pension recommendations from a regulated adviser who has since failed.
For pension protection:
- Provider failure = 100% compensation, no limit
- SIPP operator failure = up to £85,000
- Bad advice claims = up to £85,000
The protection applies to the failure of the firm managing your pension, not to poor investment returns within your pension fund.
Investment and E-Money Accounts
Investment accounts with failed firms receive protection up to £85,000 per person per firm for failures after 1 April 2019.
This covers investments like trading accounts, but only protects against firm failure, not market losses.
E-money accounts work differently.
Services like Monzo, Revolut, and similar platforms must safeguard your funds separately from their own money.
These accounts aren’t directly covered by FSCS deposit protection, but safeguarding rules require firms to keep your money in separate accounts.
Trading platforms receive investment protection.
Your Trading 212 account would be covered up to £85,000 if the platform failed, protecting the cash and assets they hold for you.
E-money protection relies on:
- Safeguarding requirements (not FSCS protection)
- Funds held separately from company money
- FCA regulation and oversight
You should check whether your provider operates as a bank with deposit protection or as an e-money institution with safeguarding rules only.
Compensation Limits and Eligible Claims
The FSCS protects different financial products up to specific limits that vary by product type and when the firm failed.
Banks and building societies now offer £120,000 protection per person since December 2025.
Investments and pensions have their own distinct limits.
FSCS Compensation Amounts by Product
Your deposits with UK-authorised banks, building societies, and credit unions receive automatic protection up to £120,000 per eligible person per institution if the firm fails. This limit applies to the total of all your accounts with that provider.
Joint accounts receive the same £120,000 protection per eligible person. Temporary high balances up to £1.4 million are protected for six months from deposit if the balance qualifies under specific life events.
For investments, mortgages, and debt management claims after April 2019, you’re protected up to £85,000 per person per firm. Pension providers offer 100% protection with no upper limit, though SIPP operators have the £85,000 cap.
The FSCS compensates you automatically for deposit claims. No application or direct contact with FSCS is required.
Limits for Insurance and Investment Products
Insurance protection depends on your policy type and when the firm failed. Compulsory insurance, including motor insurance and employer’s liability cover, receives 100% protection with no limit.
Long-term insurance policies like life insurance also receive 100% protection. Professional indemnity insurance and claims from death or incapacity due to injury are fully covered.
All other insurance types receive 90% protection of the claim value. This includes home, travel, and pet insurance policies.
Investment products, including mini-bonds, are covered up to £85,000 per person per firm for failures after April 2019. Mini-bonds often fall outside FSCS protection if they were not FCA-regulated investments, so check if your product qualifies.
Client Money and Trust Status
Client money held in trust accounts receives FSCS protection differently from standard deposits. When a firm holds your money as client money under FCA rules, those funds should be segregated from the firm’s own money.
If the firm fails, client money should be returned to you directly through the insolvency process. If there’s a shortfall in the client money pool, the FSCS may pay compensation up to the relevant product limit.
Trust status affects how your money is protected. Funds held on trust for you may not count towards the deposit limit if properly segregated, though this depends on the specific trust arrangement.
Non-UK Providers and National Savings
The FSCS only protects deposits with UK-authorised financial institutions. Banks authorised in other European countries operate under their own national compensation schemes with different limits and processes.
National Savings and Investments (NS&I) doesn’t require FSCS protection because it’s backed directly by the UK government. Your NS&I products have 100% protection regardless of the amount you hold.
If you hold money with a European bank’s UK branch, you’re covered by the FSCS. If you deal directly with the bank’s European office, you’ll fall under that country’s scheme instead.
Restrictions, Exclusions, and Best Practices
FSCS protection has specific limits on what it covers. Careful management is needed if you hold money with multiple providers.
Knowing what falls outside protection helps you make informed decisions about where to keep your money.
What FSCS Does Not Cover
FSCS protection does not extend to all financial products or situations. Cryptocurrencies and digital assets receive no protection under the scheme.
Foreign banks without UK authorisation also fall outside FSCS coverage, even if they operate in the UK. Investment losses from normal market fluctuations are not covered.
You can only claim if your investment firm fails and cannot return your assets. The scheme excludes investments in companies that are not FCA-regulated.
FSCS does not protect money held in firms that operated outside UK regulation. Your claim will be rejected if the failed company never held proper UK authorisation.
This includes many overseas investment schemes and unregulated investment opportunities.
Managing FSCS Limits Across Providers
You need to spread your money across different banking groups to maximise protection. The £120,000 limit applies per person, per authorised firm, not per account.
Different brands often share the same banking licence. If you hold £80,000 with one brand and £80,000 with its sister brand under the same licence, only £120,000 total receives protection.
Banks and building societies may operate multiple brands under one authorisation. Joint accounts receive separate protection of up to £120,000 for each account holder’s share.
A joint account with two people gets up to £240,000 protection total.
Checking Your Provider’s FSCS Status
You should verify your bank or building society holds valid FSCS protection before depositing money. Check the Financial Services Register on the FCA website to confirm your provider’s authorisation status.
Look for the FSCS logo on your provider’s website and marketing materials. Regulated banks must clearly state their FSCS protection status.
Contact your provider directly if you cannot find confirmation of their protection status. Ask which legal entity holds your deposits, as this determines your protection limit.
Keep records of this information with your account documents.
Frequently Asked Questions
The FSCS protection limit for bank deposits currently stands at £120,000 per person per institution for firms that failed after 30 November 2025. Joint accounts receive the same protection level.
You don’t need to take any action to receive compensation as the FSCS handles this automatically.
What is the maximum amount of protection provided by the FSCS for bank deposits?
The FSCS protects up to £120,000 per eligible person, per bank, building society, or credit union for firms that failed after 30 November 2025. This limit increased from £85,000 as part of measures to account for inflation since 2017.
The protection applies automatically to your eligible deposits. You receive compensation up to this limit without needing to submit a claim form.
The FSCS also protects certain qualifying temporary high balances up to £1.4 million for six months from when the amount was first deposited. This covers situations where you temporarily hold large sums, such as from a house sale or inheritance.
Can you provide a list of financial institutions that fall under the FSCS protection scheme?
UK-authorised banks, building societies, and credit unions fall under FSCS protection. These institutions must be regulated by the Prudential Regulation Authority (PRA) and the Financial Conduct Authority (FCA).
You can verify if your financial institution is covered by checking the FCA’s register online. This register lists all firms authorised to conduct regulated financial activities in the UK.
Not all institutions offering financial services qualify for FSCS protection. Foreign banks operating in the UK through branches rather than subsidiaries may be covered by their home country’s protection scheme instead.
How can individuals ascertain if their savings are safeguarded by the FSCS?
The FSCS provides a bank and savings protection checker on their website where you can verify your coverage. This tool helps you understand how much of your money is protected across different institutions.
You should confirm that your bank, building society, or credit union is authorised by UK regulators. Check the FCA register to ensure your institution appears on the list of regulated firms.
Look for FSCS branding and information on your financial institution’s website or in their terms and conditions. UK-authorised firms typically display information about FSCS protection in their customer documentation.
In what circumstances might the FSCS protection not apply to my savings or investments?
FSCS protection doesn’t cover you if your financial institution hasn’t failed but you’ve simply lost money through poor investment performance. The scheme only activates when a financial services firm is placed into an insolvency process, such as administration or liquidation.
Your deposits aren’t covered if you hold them with an institution not authorised by UK financial regulators. Foreign banks operating through branches rather than UK subsidiaries fall outside the FSCS scheme.
The protection has limits based on the type of product and when the firm failed. If you hold more than £120,000 with a single institution, only the first £120,000 is protected.
What is the duration for the FSCS to compensate eligible claimants in case of a bank failure?
The FSCS compensates you automatically for protected bank deposits when your institution fails. You don’t need to submit a claim or take any action.
The scheme aims to pay compensation quickly, though exact timescales vary depending on the complexity of the failure. The FSCS publishes information about the failed firm and compensation timeline on their website when an institution enters insolvency.
Payment typically occurs within days for straightforward bank account claims. The FSCS contacts eligible customers directly with details about when and how they’ll receive their money.
Is there a difference in the FSCS protection levels for joint and individual accounts?
Joint accounts in the UK are protected by the FSCS up to £120,000 per eligible person as of 2026. This means a joint account with two people is covered up to £240,000 in total.
Your individual FSCS protection limit is calculated by combining all accounts you hold with the same bank or building society. If you have both individual and joint accounts at the same provider, the joint account does not increase your individual FSCS protection.
Each holder of a joint account receives their own £120,000 FSCS protection allocation. This is the case no matter how many people share the account.