UK bank customers will have greater protection on their savings from 1 December, when the Financial Services Compensation Scheme (FSCS) limit rises from £85,000 to £120,000.

The Prudential Regulation Authority (PRA) confirmed the change, describing it as the largest increase since 2017 and a step to keep pace with inflation and consultation feedback.

The FSCS covers deposits per person, per authorised firm, meaning some banking groups operating multiple brands under a single licence will share the limit across those brands. Customers do not need to take any action for the new cap to apply.

The PRA also said the temporary high balance protection, used for certain life events such as proceeds from a home sale or insurance payout, will increase from £1,000,000 to £1,400,000 for six months.

Sam Woods, deputy governor for prudential regulation at the Bank of England and chief executive of the PRA, said the decision would support trust in the system. “This change will help maintain the public’s confidence in the safety of their money. It means that depositors will be protected up to £120,000 should their bank, building society or credit union fail. Public confidence supports the strength of our financial system.”

Martyn Beauchamp, the Financial Services Compensation Scheme’s chief executive officer, welcomed the increase. “This rise ensures that consumers can feel confident their money is safe, from the very first penny up to £120,000. At FSCS, we know that trust in financial services is vital for stability and growth. This enhanced protection will reassure consumers and support confidence in the UK’s financial system.”

Consumer group Which? called the change “a sensible decision” that bolsters confidence. Rocio Concha, Which? director of policy and advocacy, said: “It is also a timely reminder that, at a time when the government and regulators are trying to boost economic growth, strong consumer protections needn’t hamper those aims.”

Industry body UK Finance also endorsed the update. Eric Leenders, managing director of personal finance, said it was “right” to revise the limit to account for inflation and that the organisation would help members implement the changes.

The PRA said firms must update FSCS disclosure materials, including information sheets sent to depositors and branch notices, by the end of May 2026. The FSCS is funded by levies on financial firms authorised by the PRA or the Financial Conduct Authority.

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