A significant boost to the UK's financial safety net has come into effect, offering savers greater peace of mind. From today, 1 December 2025, the amount of cash protected per person, per authorised institution has increased by £35,000.
What Has Changed for Savers?
The Financial Services Compensation Scheme (FSCS) deposit protection limit has been officially raised from £85,000 to £120,000. This means the first £120,000 you hold with a UK-regulated bank, building society, or credit union is now guaranteed if that firm collapses.
This crucial update marks the first increase to the limit since 2017. The Bank of England, which oversees the scheme through the Prudential Regulation Authority (PRA), authorised the rise to account for inflation over the past eight years, ensuring the real value of protection is maintained.
Industry and Consumer Leaders Welcome the Move
Senior financial figures have praised the decision as vital for public confidence. Sam Woods, Deputy Governor for Prudential Regulation at the Bank of England and CEO of the PRA, stated the change helps maintain public trust in the safety of their money. He emphasised that "public confidence supports the strength of our financial system."
Martyn Beauchamp, CEO of the FSCS, welcomed the announcement, noting the rise ensures consumers feel confident their money is safe from the first penny up to the new limit. He highlighted that trust is fundamental for stability and growth in financial services.
Consumer group Which? also backed the increase. Rocio Concha, Director of Policy and Advocacy, called it a "sensible decision" that supports consumer confidence without hampering economic growth aims.
Implementation and Customer Information
The protection applies per person, per financial institution, not per individual account. The banking industry's trade body, UK Finance, has pledged to support its members in implementing the changes. Eric Leenders, Managing Director of Personal Finance, stated it was right to update the limit for inflation and confirmed work is underway to ensure customers have all necessary information about their enhanced FSCS protection.
This substantial hike represents a major reinforcement of the UK's financial safeguards, directly impacting millions of savers across the country.
