The Prudential Regulation Authority (PRA) has proposed an increase to the deposit protection limit of the Financial Services Compensation Scheme (FSCS), from £85,000 to £110,000.
The deposit protection limit has been set at its current level since 2017.
This limit represents the maximum amount of money the FSCS typically protects, should a depositor’s bank, building society or credit union become insolvent.
The PRA said the proposed increase considers the impact of inflation since the limit was last changed and is designed to give consumers confidence that their money is safe. If taken forward, the new limit would apply to firms that fail from 1 December 2025.
Deputy governor for prudential regulation and CEO of the PRA, Sam Woods, said: “Confidence in our financial system is an essential foundation for economic growth.
“We want to support confidence in our banks, building societies and credit unions by raising the amount that people can keep in their account which is covered by the deposit guarantee scheme to £110,000 per person, so all that money is safe even if the firm fails.”
CEO of the FSCS, Martyn Beauchamp, added: “Depositor protection is what FSCS is best known for, as it covers the money held in our day-to-day current accounts and savings.
“Consumers tell us that the existence of FSCS protection is a key driver of their trust in financial services, and this trust is in turn a critical component of stability and growth. It’s important that FSCS’ limit is reviewed to ensure it stays appropriate and relevant.”
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