The Prudential Regulation Authority (PRA) has proposed raising the deposit protection limit of the Financial Services Compensation Scheme (FSCS) from £85,000 to £110,000. The FSCS typically protects up to £85,000 of a depositor’s money in the event of a bank, building society, or credit union failure.

This limit has been in place since 2017. For UK-authorised CFD brokers regulated by the Financial Conduct Authority (FCA) , the FSCS also provides protection for investors, though the coverage may differ depending on the nature of the claim. CFD brokers would fall under similar protection if they were to face insolvency, offering additional confidence to retail traders.

FSCS Proposes Protection Limit Adjustment for Inflation

“Depositor protection is what FSCS is best known for, as it covers the money held in our day-to-day current accounts and savings,” Martyn Beauchamp, CEO of the FSCS, said.

The proposed increase reflects inflation since the last adjustment and is intended to reassure consumers that their money is safe if their UK-authorised financial institution fails. If the proposal is approved, the new limit will apply to firms that fail after 1 December 2025.

“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’s limit is reviewed to ensure it stays appropriate and relevant,” Beauchamp added.

FSCS Compensated £10.1 Million in Three Years

Sam Woods, Deputy Governor for Prudential Regulation and CEO of the PRA, stated that the increase is designed to support confidence in the financial system. The FSCS, established in 2001, has compensated depositors £10.1 million in the past three years, mainly for small credit union failures. Since its inception, it has paid out over £20 billion, primarily due to the 2008 financial crisis.

“The current limit of £85,000 was set back in 2017 and so it makes sense to review it. We look forward to working with the Prudential Regulation Authority as part of their consultation into the wider FSCS deposit protection system,” Eric Leenders, Managing Director for Personal Finance at UK Finance, added.