Bank Cash Deposit Compensation Limit Increasing to £120,000

The Prudential Regulatory Authority (PRA), part of the Bank of England that overseas the UK banking and building society sector, has confirmed that the Financial Services Compensation Scheme (FSCS) limit for deposits will increase to £120,000 from £85,000 per person, per banking licence on 1^st December 2025.

This is welcome news for cash investors and is higher than the PRA previously proposed limit of £110,000.

Sam Woods, Deputy Governor for Prudential Regulation at the Bank of England and CEO 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.” 

Comment

This large increase of some £35,000 reflects the fact that the £85,000 limit has been in place since 2017, and compounded inflation from January 2016 to September 2025 has been 38.74%.  The FSCS increase is warranted and to be honest, we are sure funds held in the compensation scheme will have increased in value by a similar amount over the same period, so £120,000 would appear equitable.

This means that individuals have £120,000 protection per banking licence and a couple will have £240,000 for jointly accounts under the same banking licence.

Remember though, this is per Banking Licence and not per banking brand.  Many bank brands are covered under just one banking licence, so you need to be careful.

See:  Cash Protection