FSCS Protection UK 2026: How GBP 85,000 Deposit Protection Works

The Financial Services Compensation Scheme (FSCS) is the UK's statutory safety net for customers of authorised financial services firms. If your bank, building society or credit union fails, the FSCS guarantees your eligible deposits up to GBP 85,000 per person per authorised institution. Understanding how this protection works -- and its limits -- is essential for anyone with significant savings.

The Core Protection Limit

In 2026, the FSCS deposit protection limit is:

• GBP 85,000 per person per authorised institution
• GBP 170,000 for joint accounts (GBP 85,000 per person)

This limit applies to the combined total of all deposits you hold with a single authorised institution, not per account. If you have GBP 50,000 in a current account and GBP 50,000 in a savings account with the same bank, only GBP 85,000 is protected -- the remaining GBP 15,000 would be at risk if the bank failed.

What Is an "Authorised Institution"?

This is the critical detail many savers miss. An authorised institution is a firm with its own banking licence from the Prudential Regulation Authority (PRA). Several well-known brands may share a single banking licence, meaning your combined deposits across those brands count toward the same GBP 85,000 limit.

Notable examples include:

• Halifax, Bank of Scotland and Lloyds Bank all fall under Lloyds Banking Group (though they hold separate licences in most cases -- always check)
• First Direct and HSBC share an authorised firm
• Marcus (by Goldman Sachs) operates under Goldman Sachs International Bank

Always check the FSCS register at fscs.org.uk or the FCA register to confirm which authorised entity holds your money. The brand name on your debit card is not always the same as the authorised institution.

What Happens When a Bank Fails?

The FSCS aims to pay out eligible deposits within seven working days of a firm being declared in default. For most depositors, the process is largely automatic:

1. The Prudential Regulation Authority (PRA) or FCA declares the firm in default
2. The FSCS contacts eligible depositors directly
3. Funds are transferred to a new account or paid by cheque
4. You do not need to make a claim -- the FSCS acts automatically for eligible deposits

For amounts above the protected limit, you become an unsecured creditor of the failed institution, which means recovery is uncertain and may take years through insolvency proceedings.

Temporary High Balance Protection

The FSCS provides enhanced, temporary protection for up to GBP 1,000,000 in certain life circumstances. This Temporary High Balance Protection lasts for six months from when the funds are deposited and covers money received from:

• Property sale proceeds
• Divorce or dissolution of a civil partnership settlements
• Personal injury compensation
• Redundancy payments
• Insurance payouts
• Inheritance or proceeds of a death in service benefit

If you receive a large sum in any of these categories and hold it with a bank that subsequently fails, the temporary limit provides cover well above the standard GBP 85,000 -- but only for the six-month window.

Which Accounts Are Covered?

The following accounts typically qualify for FSCS protection:

• Current accounts
• Easy-access savings accounts
• Fixed-rate bonds and term deposits
• ISAs (Cash ISAs and the cash element of Stocks and Shares ISAs)
• Junior ISAs
• Workplace pension contributions held as cash

The following are generally not covered by the deposit protection scheme (though they may have separate FSCS investment protection):

• Stocks, shares and funds held in investment accounts
• Bonds and gilts held directly
• Cryptocurrencies
• Money held with firms that are not PRA-authorised (e.g., some fintech apps using e-money licences)

E-Money Accounts and Fintech Apps

This is an increasingly important distinction. Many popular fintech apps -- including some prepaid cards and digital wallets -- hold your money under an e-money licence rather than a banking licence. E-money firms are required to "safeguard" your funds by holding them in a ring-fenced account at a regulated bank, but this safeguarding arrangement is different from FSCS protection.

In the event of the e-money firm failing, you should be able to recover your funds through the safeguarding arrangement -- but the process is less certain and less automatic than FSCS protection. Always check whether a provider is FSCS-protected or merely safeguarded.

How to Spread Savings Safely

If you have savings above GBP 85,000, the practical strategy is to spread funds across multiple authorised institutions:

Strategy for GBP 250,000 in savings:

• GBP 85,000 with Bank A
• GBP 85,000 with Bank B
• GBP 80,000 with Bank C

This ensures the full GBP 250,000 is within FSCS limits. Alternatively, using a joint account with a partner doubles the protected amount to GBP 170,000 per institution.

For savers using NS&I (National Savings and Investments) products -- including Premium Bonds, fixed-term bonds and Income Bonds -- there is no limit. NS&I is backed directly by HM Treasury, meaning your money carries the full faith of the UK government regardless of the amount.

Is the GBP 85,000 Limit Likely to Change?

The limit is reviewed periodically by the Prudential Regulation Authority. It is linked (loosely) to the euro-denominated limit in EU member states and can be adjusted. The current GBP 85,000 limit has been in place since 2017. There is no confirmed date for a future revision, but it remains possible that the limit will increase in coming years to keep pace with inflation.

Checking FSCS Protection

The FSCS website at fscs.org.uk includes a protection checker tool where you can enter a firm's name and verify its protection status. The FCA register at register.fca.org.uk also shows whether a firm holds a banking licence and under which authorised entity name.

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Use the CalcHub Savings Calculator to see how spreading deposits across institutions affects your total protected savings.