Are credit unions safe?

Savings with a UK credit union are as well protected as savings with a bank: the FSCS covers them up to £120,000 per person, per credit union, and aims to pay within seven working days if one fails. Credit unions are authorised by the Prudential Regulation Authority and regulated by both the PRA and the FCA. They are small and they do fail, a few each year, but in every recent failure the FSCS repaid members. The one exception to the cover is deferred shares.

How your savings are protected

From the FSCS's credit union page and the PRA's depositor protection rules. The limit is per credit union, separate from any bank or building society, so savings with a credit union add to the protection you have elsewhere (FSCS protection explained).

Who regulates credit unions

A credit union must be authorised by the PRA, with the FCA's consent, and is then supervised by both (FCA). Northern Ireland's credit unions came under the same regime, and the FSCS, on 31 March 2012. The regulators oversee around 340 UK credit unions (PRA and FCA, November 2026), which at 30 June 2026 had 2.19 million adult members and £4.06 billion of members' savings, held as shares (Bank of England credit union statistics).

The rules that keep them safe

From the PRA Rulebook's Credit Unions part. Across the sector, capital was £649.6 million at 30 June 2026, about 13% of total assets, though individual credit unions vary. Credit unions with under £100 million of assets are not required to plan for recovery or an orderly exit, so if one fails, members are repaid through the FSCS (PRA and FCA discussion paper, November 2026).

Credit unions that have failed

Credit unions are small and some do fail. Three failed in each of the FSCS's last two financial years, at a total cost of about £17 million in 2024/25 and £1.1 million in 2025/26 (FSCS class statements). Recent cases, all paid out by the FSCS:

From each failure's FSCS announcement. A Bank of England staff study counted 85 credit unions referred to the FSCS for payout from 2002 to 2015. We found no credit union failure announced in 2026 up to July, but could not read the FSCS's full failed-firms list.

Are credit unions safer than banks?

For savings up to £120,000, equally safe: the same FSCS protection applies. As institutions they are different. A credit union is owned by its members, must keep its spare money in a narrow range of safe assets and can borrow little, but it is far smaller and less diversified than a bank, and failures are more common. Above the limit the same rule applies as with banks: spread the money across separately authorised institutions (the safest bank account in the UK).

Are credit unions safe if a bank collapses? Your savings are: they are protected per credit union, separately from any bank. A credit union can keep its spare cash on deposit with banks, so a bank failure could hit the credit union's own finances, but that does not reduce the FSCS cover on your savings.

Frequently asked questions

Are credit unions safe?

Savings with UK credit unions are protected by the FSCS up to £120,000 per person, per credit union, the same as banks, except deferred shares. Credit unions are authorised by the PRA and regulated by the PRA and FCA. A few fail each year, and the FSCS has repaid members in every recent case.

Are credit unions safer than banks?

For savings up to £120,000 they are equally safe, because the same FSCS protection applies. As institutions, credit unions are much smaller and less diversified than banks, and they fail more often.

Are credit unions FSCS protected?

Yes. Shares and deposits with UK credit unions, including in Northern Ireland, are protected up to £120,000 per person per credit union. Deferred shares are not protected.

Has a credit union ever failed in the UK?

Yes. Three failed in each of the FSCS's 2024/25 and 2025/26 financial years, including London Community Credit Union, whose 18,335 members were due around £15.4 million, and the FSCS repaid members in each case. A Bank of England study counted 85 failures from 2002 to 2015.

Are credit unions safe from a bank collapse?

Your savings are protected per credit union, separately from any bank, so a bank failure does not reduce your FSCS cover. A credit union can hold its spare cash with banks, so a bank failure could affect its own finances.