FSCS Deposit Protection to Increase to £120,000 from December 2025

Big news for investors and savers: the Financial Services Compensation Scheme (FSCS) is increasing its deposit protection limit to £120,000 from 1 December 2025. For the first time since 2017, the limit is rising from the current £85,000, an uplift that will provide significantly greater peace of mind for consumers across the UK.

From December, if a UK-authorised bank, building society or credit union were to fail, eligible customers will be protected up to the new £120,000 limit per person, per authorised firm.

Announced on 18 November 2025 by the Prudential Regulation Authority (PRA), this enhancement follows an extensive consultation earlier in the year. Industry feedback played an important role in shaping the final measures, which include one of the most notable improvements to UK depositor protection in nearly a decade.

What This Means for Hilbert Investors

This increase is also positive news for investors using Hilbert Investment Solutions Deposit Series products. These deposit-backed investment products place client funds with UK-authorised deposit takers covered by the FSCS Deposit Protection Scheme.

From 1 December 2025, eligible investors will benefit from the higher £120,000 FSCS protection limit, providing enhanced security on the cash deposits that underpin these strategies. This strengthens the overall risk-management framework for clients seeking secure investment solutions and reinforces Hilbert’s commitment to offering dependable, capital-secure alternatives in the current market.

Key Details of the New FSCS Protection Limits

• Protection Amount: Up to £120,000 per person, per UK-regulated financial institution
• Joint Accounts: Up to £240,000
• Temporary High Balances: Rising from £1 million to £1.4 million, protected for six months
• Automatic Coverage: No action required by account holders
• Inflation-Linked: The new limit reflects updated inflation data
• Boost to Public Confidence: Expected to strengthen trust in the security of UK savings

More Protection When It Matters Most

The higher allowance for temporary high balances, such as when someone sells a home, receives an inheritance, or is paid a large insurance settlement, will provide protection up to £1.4 million for up to six months.
This ensures that short-term surges in account balances remain protected during key life events.

According to the FSCS, the updated limits mirror recent inflation trends and aim to give savers “greater certainty that more of their money is protected.” The organisation emphasised that the enhancement supports stronger trust in the UK financial system, vital for long-term stability and economic resilience.

Industry Response

The announcement follows the FSCS’s recent forecast of a £342m levy for 2026/27, a slight reduction from the previous year, highlighting ongoing financial stability and operational efficiency.

FSCS CEO Martyn Beauchamp commented:
“This rise ensures that consumers can feel confident their money is safe, from the very first penny up to £120,000… This enhanced protection will reassure consumers and support confidence in the UK’s financial system.”

He added that the refreshed ‘FSCS Protected’ badge will make it easier for consumers to identify protected savings providers.

Sam Woods, Deputy Governor for Prudential Regulation at the Bank of England and CEO of the PRA, said:
“This change will help maintain the public’s confidence in the safety of their money… Public confidence supports the strength of our financial system.”

Looking Ahead

With the increase in FSCS protection and the rising demand for low-risk investment options, many advisers are reviewing how these changes impact clients seeking stable, deposit-backed returns.

Investors and advisers looking for FSCS-protected, deposit-backed solutions can explore the full range of Hilbert Investment Solutions Deposit Series products, designed to offer competitive returns with enhanced peace of mind.

Hilbert does not provide investment or tax advice. If you are unsure whether an investment is right for you, you should seek professional financial advice. Hilbert’s products are available via a regulated platform. Your capital is at risk and you may lose some or all of the money you invest.