Paul Sanchez
The Financial Services Compensation Scheme (FSCS) protects UK bank accounts up to £85,000 per person, per institution. The FSCS only applies to organisations regulated by the Financial Conduct Authority (FCA). The main categories of protected savings include current accounts, savings accounts, cash ISAs, small business accounts, and certain qualifying temporary high balances of up to £1 million for six months. It's important to note that not all banks offering savings accounts in the UK are regulated in the UK, and therefore may not be protected under the FSCS.
| Characteristics | Values |
|---|---|
| Protection limit per person, per institution | £85,000 |
| Protection limit for joint accounts | £170,000 |
| Protection limit for temporary high balances | £1 million for six months |
| Protection limit for funeral plans | £85,000 per eligible person, per firm |
| Protection limit for insurance | 100% of the amount due under the long-term contract of insurance |
| Organisations covered by the Financial Services Compensation Scheme (FSCS) | Banks, building societies, credit unions, Northern Ireland credit unions, certain overseas firms with branches in the UK |
| Organisations not covered by the FSCS | E-money or payment services firms, investments or savings products structured as long-term contracts of insurance |
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What You'll Learn
The Financial Services Compensation Scheme (FSCS)
The FSCS was set up by the UK government under the Financial Services and Markets Act 2000 and is funded by levies on authorised financial services firms. The scheme is free for consumers to use and has helped more than 4.5 million people since 2001, paying out over £26 billion in compensation. The FSCS covers deposits, insurance, debt management, funeral plans, investments, pensions, mortgages, and payment protection insurance to varying amounts.
The FSCS protection limit for UK bank accounts is £85,000 per person, per institution. This means that if you have multiple accounts with the same bank or building society, you will be covered up to a maximum of £85,000 for the total of your accounts. Joint accounts have protection up to £170,000. It is important to note that some banks offering savings accounts in the UK may not be regulated in the UK and therefore may not be protected by the FSCS.
In the case of claims against a failed insurance company, the FSCS may cover the cost of another firm taking over your policy or make payments directly to claimants. The FSCS publishes information on its website about what customers need to do when a firm fails. You can use the FSCS protection checker on its website to see if your money is protected and if any of your savings are at risk.
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£85,000 limit per person, per institution
The Financial Services Compensation Scheme (FSCS) protects UK bank accounts up to £85,000 per person, per bank, building society or credit union. This includes eligible deposits in current accounts, savings accounts, cash ISAs or savings bonds. The FSCS applies to organisations regulated by the Financial Conduct Authority (FCA) and only compensates customers of failed financial services firms as a last resort.
The £85,000 limit applies to the total eligible deposits of each person, per PRA-authorised firm. So, for deposits in a joint account, each account holder is protected up to the deposit protection limit, i.e. the total protection adds up to two times £85,000. If you have a current and savings account with one bank, the total coverage is still £85,000 for all accounts combined. A PRA-authorised firm may own several banking and building society brands, so anyone with deposits in more than one account under a single brand, or multiple accounts under different brands owned by a single firm, is only protected up to a total of £85,000 across all these accounts.
The FSCS has a protection checker that you can use to see what's covered. You can also check the Financial Services Register to see if your bank or building society is covered. Banks and building societies whose deposits are FSCS-protected are required to display FSCS posters at branches listing the brands that share protection, provide depositors with an annual information sheet describing the protection, and include a statement regarding protection on depositor statements of account.
The FSCS also covers certain qualifying temporary high balances of up to £1 million for six months from when the amount was first deposited. This special provision is to cover life events such as selling your home, inheritances, redundancy, and insurance or compensation payouts that could lead to a temporarily high savings balance. If your bank was to go bust while you had a high balance protected, to claim you'd need to prove where the funds came from, and be prepared to wait up to three months for any cash over £85,000.
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Joint accounts have double protection
In the UK, the Financial Services Compensation Scheme (FSCS) protects bank customers in the event of their bank going bust. The scheme guarantees to protect up to £85,000 per person, per institution. This includes current accounts, savings accounts, cash ISAs, small business accounts, and some guaranteed equity bonds.
Joint accounts are also protected by the FSCS, and this protection doubles to £170,000. This means that each account holder is protected up to the deposit protection limit, with the total protection adding up to two times £85,000. If you have an individual account and a joint account within the same banking group, the £85,000 compensation limit will apply across these accounts, not to each separate account.
It is important to note that the FSCS only applies to organisations regulated by the Financial Conduct Authority. Banks covered by the scheme will display the 'FSCS Protected' badge in branches, online, and in mobile apps. You can also check if your bank is covered by referring to the Financial Services Register.
In addition to the FSCS protection, savings of up to £1 million may be protected for a six-month period if your bank goes bust. This covers life events such as selling your home, inheritances, redundancy, and insurance or compensation payouts that result in a temporarily high savings balance.
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Temporary high balances up to £1 million
In the UK, bank accounts are insured by the Financial Services Compensation Scheme (FSCS). The FSCS provides protection for temporary high balances of up to £1 million for six months from when the amount was first deposited. This protection is available for certain qualifying life events, such as selling a home, receiving an inheritance, redundancy, or insurance or compensation payouts. For example, if you sell a £600,000 home and intend to buy another one within six months, the FSCS protection ensures that you don't need to spread your savings across multiple accounts to stay within the standard £85,000 protection limit.
To prove you've held a temporary high balance, the FSCS may ask for evidence such as a property sale receipt, a court judgement, a letter from an insurer, or documentation from a lawyer, conveyancer, mortgage provider, former employer, or pension trustee. This protection is automatic, and in the event of your bank going bust, the FSCS will compensate you. While the current protection limit is £1 million, the Prudential Regulation Authority has proposed raising this limit to £1.4 million, effective from 1 December 2025.
It is important to note that the FSCS protection for temporary high balances only applies to specific life events and is not permanent. If you have permanently high cash balances, you may need to seek professional advice on how to spread your cash across multiple accounts to mitigate risk and ensure full protection. Additionally, the FSCS protection for bank accounts does not cover all types of financial products, such as stocks and shares, funds, or pensions, which are considered risk-based investments rather than savings.
The FSCS also provides protection for other financial products, such as life insurance, pensions, and investment funds, depending on how they are set up. In the case of life insurance, if your provider goes bust, the FSCS will try to find another provider to take over your policy or issue a substitute policy. For pensions, the FSCS covers pensions regulated by the Financial Conduct Authority. It is recommended to refer to the FSCS website for detailed information on what is covered and the specific protection limits for different financial products.
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Protection for funeral plans, insurance, and investments
In the UK, funeral plans, insurance, and investments are protected in various ways. Funeral plans, for instance, are designed to help individuals meet the cost of their funeral. They are protected against inflation, ensuring that rising funeral costs are not reflected in the plan. Funeral plans in the UK have been regulated by the Financial Conduct Authority (FCA) since July 2022. If a funeral plan provider goes out of business, it should have arrangements with a new regulated provider to carry out the funeral plan or provide compensation. The Financial Services Compensation Scheme (FSCS) protects eligible individuals for up to £85,000 per person, per firm.
Additionally, individuals can choose to purchase funeral insurance or over-50s insurance policies. These policies pay out a lump sum to the policyholder's family upon their death. However, the payout may not be sufficient to cover all funeral costs due to inflation and rising expenses. It is important to note that the money from insurance policies may not be released to the family quickly, potentially causing delays in funeral arrangements. On the other hand, life insurance policies do not protect against the increase in funeral costs, but increasing term life insurance payouts can be adjusted for inflation.
Savings accounts in the UK are also protected. The FSCS protects individuals with savings of up to £1 million for a six-month period if their bank or building society goes bust. This temporary high-balance protection covers life events such as selling a home, inheritances, redundancy, and insurance or compensation payouts. The FSCS also covers pensions, life assurance, insurance premiums, and investment funds, depending on their setup.
To ensure your money is protected, it is important to check that your financial service provider is authorised by the Prudential Regulation Authority and covered by the FSCS.
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Frequently asked questions
Yes, UK bank accounts are insured by the Financial Services Compensation Scheme (FSCS).
The FSCS covers up to £85,000 per eligible person, per bank, building society or credit union. Joint accounts are covered up to £170,000.
Yes, the FSCS only applies to organisations regulated by the Financial Conduct Authority (FCA). Some banks offering savings accounts in the UK are not regulated in the UK and would not be protected.
Look for the '"FSCS Protected" badge' displayed in branches, online and in mobile apps. You can also use the FSCS's protection checker tool or check the Financial Services Register.
Savings of up to £1 million may be protected for a six-month period if your bank goes bust due to certain life events such as selling your home or receiving an inheritance.
