The Prudential Regulation Authority (PRA) has proposed raising the deposit protection limit from £85,000 to £110,000. This change would protect more of savers’ money if their bank or building society fails. The PRA says the increase is needed to account for inflation since the limit was last set in 2017.
If approved, the new limit will take effect on 1 December 2025. Rob Mansfield, an independent financial adviser at Rootes Wealth, called the change “great news for savers and for confidence in our banking system.”
Currently, the Financial Services Compensation Scheme (FSCS) protects up to £85,000 per person per institution. For joint accounts, the protection is £170,000.
Savers with more than the limit should spread their money across different banks to ensure full coverage.
PRA proposes new deposit protections
The FSCS has paid over £20 billion to depositors since it was founded 25 years ago, mostly due to the 2008 financial crisis.
Martyn Beauchamp, chief executive of the FSCS, said reviewing the limit regularly is important to keep it relevant. The proposal is part of a broader consultation on deposit protection. It could also increase the limit on “temporary high balance claims” from £1 million to £1.4 million.
These claims cover customers with temporarily large balances, such as those moving house or receiving insurance payouts. Sam Woods, chief executive of the PRA, said customer confidence in the financial system is vital for economic growth. The government has asked regulators to revise their strategies to promote growth.
Rocio Concha, director of policy and advocacy at the consumer group Which?, called the change “a sensible decision.” She added that strong consumer protections and economic growth are closely linked, especially as the government and regulators aim for growth.
