The FSCS deposit protection limit is rising to £120,000 this December. Here’s what the change means for your savings - and how to make sure your money stays fully protected.
A rise in the deposit limit is good news for savers. With more cash now covered, people can feel more confident that their money is protected if a bank or building society were ever to fail. But with the higher limit comes a few important things to think about - especially if you’re holding larger balances or using multiple banking brands.
Why is the deposit limit increasing?
The Prudential Regulation Authority (PRA) is required to review the FSCS deposit compensation limit at least every five years under the Deposit Guarantee Scheme Regulations 2015. After consulting earlier this year, the PRA confirmed new rules in November 2025, bringing the limit up to £120,000.
For context, the limit has been £85,000 since 2017, so this uplift reflects the increased cost of living, higher cash balances across households, and a growing focus on financial resilience.
What about temporary high balances?
Life doesn’t always follow a predictable pattern - major events like selling a property, receiving an inheritance, divorce settlements or insurance payouts can temporarily increase your cash holdings.
To protect you during these moments, the FSCS also covers temporary high balances, which will rise to £1.4 million from December 2025. These are protected for up to six months from the date the funds are deposited. It’s a crucial safety net at times when you may not have had the opportunity to diversify or invest those funds yet.
One bank, one licence, one limit
A common - and sometimes costly - misunderstanding is how FSCS protection applies when banks share a licence.
If you hold money across multiple brands that sit under the same authorised banking group, the FSCS views them as one firm.
That means your £120,000 limit applies to the total combined amount, not each individual account or brand.
Understanding which banks share a licence is essential if you want to avoid unintentionally breaching the protection limit. This is where smart structuring really matters - and where we can help.
How we can help you navigate the new landscape:
As a multi-service firm, we help our clients take a joined-up approach to their money - and changes like these are exactly where our accountancy, wealth and tax specialists work best together.
1. Cash-flow and savings optimisation
Our Wealth Management team can help you:
- Spread savings across the right institutions
- Maximise FSCS protection
- Align cash reserves with your long-term investment plan
- Ensure excess cash is working as hard as it should
2. Planning around major life events
Selling a business, receiving an inheritance, or completing a property sale?
Together, our Tax Advisory and Wealth Management teams ensure:
- Temporary high balances are protected
- Funds are moved strategically within the six-month window
- Tax-efficient structures are in place before you invest or disperse funds
3. Understanding banking licences
We can map out your existing accounts to check whether you’re unknowingly over the limit with any single banking group - something many clients discover only after working with us.
4. Integrated accountancy insight
Your accountant has a unique view of your financial picture. Alongside our wealth specialists, we ensure your cash planning supports:
- Business liquidity needs
- Dividend planning
- Personal and corporate tax efficiency
Long-term financial resilience
What should you do next?
The increase in FSCS protection is good news - but as with all regulatory changes, it’s important to understand how it affects you, not just savers in general. If you hold substantial cash, have multiple banking relationships, or anticipate major transactions in the year ahead, now is an ideal time to review your arrangements. If you’d like to talk through your current setup, or build a strategy for the new £120,000 limit, we’re here to help.
Important information
This article is for information purposes only. It is not intended as investment advice.
