Are Your Savings Protected? Understanding FSCS Protection
Quick answer: The Financial Services Compensation Scheme (FSCS) protects up to £120,000 per person, per authorised UK bank or building society, if that institution fails. The limit applies per banking licence, not per bank brand — several well-known "different" banks share a single licence, so £120,000 spread across two accounts that share a licence is not £240,000 of protection, it's still £120,000. Anything held above the limit at a single licence is at risk if that institution collapses.
Most people assume "my money's in a bank, it's safe" without checking what that protection actually covers, or where its edges are. For anyone holding meaningful savings, particularly a sinking fund or emergency fund sitting in cash, this is worth five minutes to check properly.
What exactly does the £120,000 limit cover?
FSCS protects deposits (current accounts, savings accounts, cash ISAs) held with any bank, building society or credit union authorised by the UK's Prudential Regulation Authority, up to £120,000 per eligible person per authorised firm. Joint accounts are protected up to £240,000 combined (£120,000 per named account holder). The limit rose from £85,000 to £120,000 on 1 December 2025; the change was automatic, so there's nothing to apply for.
If you have a sole account and a joint account at the same firm, your money in both counts towards one £120,000 limit.
- Savings held at Bank A: £60,000 → fully protected (under £120,000 limit)
- Savings held at Bank B: £135,000 → £120,000 protected, £15,000 at risk if Bank B fails
Why might two "different" banks actually share one licence?
Many UK banking brands operate under a single shared authorisation — a group that owns several household-name savings brands may only hold one FSCS protection limit across all of them combined, not one each. This is the single most common way people accidentally lose protection: assuming two different-sounding brand names means two separate £120,000 limits.
Before splitting savings across banks to stay under the limit, check each institution's FSCS status directly (the FSCS website has a bank-by-bank lookup) — the protection is per licence, and the brand name on the app isn't a reliable guide to which licence sits behind it.
What should you do if your savings are above £120,000 at one institution?
Split balances across genuinely separate licences, keeping each institution's total under £120,000. This is standard practice, not excessive caution, for anyone holding a large emergency fund, a house deposit, or proceeds from a property sale in cash.
What if you only hold a large balance for a short time?
Money from certain life events, such as selling your home, an inheritance or an insurance payout, can count as a temporary high balance. It's protected up to £1.4 million for up to six months from when it lands in your account, giving you time to spread it out or use it. Check the FSCS rules for which events qualify before you rely on this.
Map your total cash savings and where each pot currently sits with the Budget Planner — it's the easiest way to spot when one account has quietly grown past the protection threshold.
FSCS limits and coverage rules are set by the UK government and FSCS and are subject to change — check fscs.org.uk directly for the current limit and to confirm which licence a specific bank or brand sits under. This is not financial advice.
See Where Your Savings Actually SitTrack your savings across accounts to spot when a balance has grown past the FSCS protection threshold.Try the Budget Planner