Bank of England, which includes the Prudential Regulation Authority (PRA) has proposed to raise the deposit protection limit of the Financial Services Compensation Scheme (FSCS) from £85,000 to £110,000.

The deposit protection limit – which represents the maximum amount of money the Financial Services Compensation Scheme (FSCS) typically protects should a depositor’s bank, building society or credit union become insolvent – has been set at £85,000 since 2017.

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.

The proposal comes as part of a wide-ranging consultation on deposit protection provided by the FSCS. Other proposals include:

An increase in the limit applicable to certain temporary high balance claims – used for qualifying life events like buying or selling a house and payouts from insurance policies – from £1 million to £1.4 million, with effect from 1 December 2025.

The FSCS is the UK’s Deposit Guarantee Scheme. It protects eligible deposits if a firm fails, up to a limit set by the PRA. Following a review of the deposit protection limit carried out in accordance with the Deposit Guarantee Scheme Regulations (DGSR), the PRA proposes to increase the deposit protection limit from £85,000 to £110,000, with effect from 1 December 2025

The FSCS, established in 2001, has paid compensation of £10.1 million to depositors in the past three full financial years, primarily in relation to small credit union failures. Since it was established, the FSCS has paid over £20 billion, primarily in relation to deposit failures during the 2008 financial crisis.