Deposit Protection (FSCS)

The limit depends on when the firm fails

When a firm fails, the Financial Services Compensation Scheme (FSCS), the UK's deposit guarantee scheme, compensates people for their eligible deposits. The amount is capped at limits set by the Prudential Regulation Authority (PRA). The limit that counts is the one in force on the date the firm fails, and for the standard limit that is £120,000.

The scheme covers banks, building societies and credit unions authorised in the UK. It also covers deposits held at a UK branch or subsidiary of an overseas firm that has permission to accept deposits.

The limit applies per person and per firm

The standard limit applies to each person at each authorised firm, not to each account. Money in a current account and a savings account at the same firm is added together before the limit is applied. A firm can trade under several brands: if they share one licence, deposits across all of them count towards a single limit.

In a joint account each holder is protected separately up to £120,000, so a couple with one joint account are protected up to twice that.

Temporary high balances have a separate limit

A large sum held only for a short time, such as money from a house sale, can qualify as a temporary high balance (THB). For certain THB claims, the limit is £1,400,000. This protection lasts for up to six months.

A THB arising from a payment connected with personal injury or incapacity has no monetary limit at all.

Not every deposit is eligible

Compensation covers only eligible deposits. These include current accounts, savings accounts and cash ISAs held with an authorised firm. The PRA's rules set out what makes a deposit eligible, including exclusions that relate to the depositor.