The Prudential Regulation Authority (PRA) has confirmed that the Financial Services Compensation Scheme (FSCS) deposit protection limit will increase from £85,000 to £120,000 from the start of December.

The FSCS is a government-backed scheme that protects your savings. If an authorised bank, building society or credit union fails, the FSCS will repay your eligible deposits up to the protection limit.

Alongside the core protection limit, the cap for Temporary High Balances (THBs) will increase from £1 million to £1.4 million on 1 December.

THB protection applies to qualifying life events that can temporarily increase your account balance, such as buying or selling a house or insurance claim pay outs.

What is changing?

• The standard FSCS protection level increases to £120,000 for eligible deposits held with a single authorised institution.
• The temporary high balance limit rises to £1.4 million for qualifying life events.
• The rules apply per individual and per institution, so it is important to understand how your accounts are structured.
• Joint accounts receive separate protection. A joint account held by two people would be protected up to £240,000 (£120,000 per person). This makes joint accounts particularly useful for couples with substantial shared savings.

Key actions to consider

These changes reflect the impact of inflation over recent years and mark the first uplift since 2017. You may want to:

1. Review your current deposit levels with each institution – banking groups operate multiple brands under a single licence.
2. Consider whether any upcoming life events might involve significant temporary balances.
3. Check that your bank or building society is fully authorised and FSCS protected.

Seek professional advice

If you’d like a review of your savings strategy, as part of your wider financial plan, please get in touch.

We’ll work with you to create a tailored plan that could help you grow your wealth and feel more confident about the future.

Please remember, this content is provided for information purposes only. Investment involves risk. Past performance is not a guarantee or indication of future results. Investment return and the principal value of an investment may go up or down and may result in the loss of the amount originally invested. All investors should seek professional advice prior to any investment decision, to determine the risks associated with the investment and its suitability.