The limit of the Financial Services Compensation Scheme (FSCS) has been increased from £85,000 to £120,000, effective from 1st December 2025.
This is a last resort compensation scheme for deposits in certain financial services accounts, such as bank accounts and cash savings held with a bank.
Note: there's no change for investments or self-invested personal pensions (which remains at £85,000).
Simply put, that means if your bank were to go out of business, and were not able to return any of your money, the FSCS would be able to compensate you up to £120,000 (if you meet the eligibility criteria).
Increasing this to £120,000 from £85,000 is welcome news, as it has been at £85,000 for nearly 10 years, without any adjustment for inflation (the price of things getting more expensive over time, which also increases the need to have more in your bank account).
It might seem a lot, but if you consider your future, if you save cash steadily over time, you might have a significant amount.
For investments and pensions, companies actually hold your money and investments entirely separately from their own money (required by law), so it’s very unlikely that your money would not be returned to you if they were to go out of business, so you don’t really need to worry about the FSCS scheme too much.
Nuts About Money tip: if you’ve got lots of savings in cash, consider investing some - over the years, you’ll likely make significantly more on average, and your money should keep ahead of the price of things getting more expensive over time too (unlike cash savings). Check out Beach¹ an easy to use app where the experts handle the investments.
