The Prudential Regulation Authority (PRA) has today proposed to raise the deposit protection limit of the Financial Services Compensation Scheme (FSCS) from £85,000 to £110,000.
The proposed increase takes into account inflation since the limit was last changed, and is designed to give consumers confidence that their money is safe if their UK-authorised bank, building society or credit union fails.
If taken forward, the new limit would apply to firms that fail from 1 December 2025.
Sam Woods, Deputy Governor for Prudential Regulation and CEO of the PRA said, “Confidence in our financial system is an essential foundation for economic growth.
“We want to support confidence in our banks, building societies and credit unions by raising the amount that people can keep in their account which is covered by the deposit guarantee scheme to £110,000 per person, so all that money is safe even if the firm fails.”
Martyn Beauchamp, CEO of the FSCS, added, “Depositor protection is what FSCS is best known for, as it covers the money held in our day-to-day current accounts and savings. Consumers tell us that the existence of FSCS protection is a key driver of their trust in financial services, and this trust is in turn a critical component of stability and growth.
“It’s important that FSCS’s limit is reviewed to ensure it stays appropriate and relevant.”
Rob Mansfield, Independent Financial Advisor at Rootes Wealth Management said, “A higher FSCS limit is great news for savers and for confidence in our banking system. For those holding significant cash savings it will provide more shelter. Uprating the limit in line with inflation is very welcome.
“The Government need to be careful about mixed messages as there are rumours that Cash ISAs will be made less attractive to try and promote investment and so there is room for confusion if cash is being rewarded and punished at the same time.”
Bob Singh, Founder at Chess Mortgages added, “The move will be welcomed by consumers as it will provide them with greater security for their savings. Some savers may no longer need to spread their savings across a few lenders to avail themselves of the safety net.”
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