FSCS protection explained: how much of your money is safe if a UK bank fails

The Financial Services Compensation Scheme (FSCS) repays eligible deposits if a UK-authorised bank, building society or credit union fails. The limit is £120,000 per person, per authorised firm. It rose from £85,000 on 1 December 2025, the first increase since 2017. Joint accounts are protected to the same limit for each holder, and certain life events qualify for temporary cover of up to £1.4 million. This guide covers what counts, what does not, and how a payout actually works.

The limit, in numbers

"Per authorised firm" is the part that matters

The limit attaches to the banking licence, not the name on the app. Two brands on one licence give you one £120,000 between them. Halifax and Bank of Scotland share one; HSBC UK, first direct and M&S Bank share one; NatWest and Ulster Bank share one. The reverse is also true: Lloyds and Halifax are separately licensed even though they are the same group, so each gets a full limit. The full list is in our guide to which UK banks share a banking licence.

Temporary high balances

If a large sum lands in your account because of a life event, the FSCS protects it above the standard limit for six months from the date the money became legally yours. Qualifying events include the sale of your main home, a property purchase or equity release, an inheritance, an insurance payout, retirement benefits, redundancy, divorce or the dissolution of a civil partnership, and compensation awards. Moving the money to another bank does not restart the six months. A second home does not qualify.

What is not covered

E-money and payment firms such as Wise, PayPal balances and prepaid cards are not deposits and are not FSCS-protected; they must "safeguard" client money, which is a weaker arrangement. Savings platforms (Raisin, Hargreaves Lansdown Active Savings, Flagstone and similar) are not protected themselves, but money they place with a regulated bank is protected under that bank's licence. NS&I is outside the scheme entirely because every pound is backed by HM Treasury. Crypto is not covered. Money with a bank's EU or other overseas entity falls under that country's scheme: Revolut's Lithuanian bank, for example, is covered by Lithuania's scheme up to €100,000, while Revolut Bank UK Ltd is covered by the FSCS.

How a payout works

You do not need to claim. When a deposit-taker fails, the FSCS uses the firm's records to identify eligible depositors and aims to pay within seven working days, usually by cheque or by transfer to a nominated account. Larger, more complex balances and temporary high balances can take up to three months. Historically the scheme has met its target: the vast majority of depositors in post-2008 UK failures were paid within a week.

How this relates to credit ratings

FSCS protection is the same whatever a bank's rating. A rating tells you how likely you are to need the scheme, which only starts to matter once you hold more than £120,000 with one licence holder. For balances above the limit, the practical choices are to spread money across separately licensed institutions, to use a temporary high balance where it applies, or to favour higher-rated banks. Our ranking of UK banks by credit rating is built for that second decision.

Frequently asked questions

What is the FSCS protection limit in 2026?

£120,000 per eligible person, per authorised firm, for deposits with UK-authorised banks, building societies and credit unions. The limit rose from £85,000 on 1 December 2025.

Is the FSCS limit per account or per person?

Per person, per banking licence. All the accounts you hold with one licence holder, including your share of joint accounts, are added together and protected up to £120,000 in total.

How are joint accounts protected?

Each account holder is protected up to £120,000 for their share, so a two-person joint account is covered to £240,000. Each person's share counts alongside any sole accounts they hold with the same firm.

What is a temporary high balance?

Extra cover of up to £1.4 million per person for six months after a qualifying life event such as selling your main home, inheritance, redundancy, divorce or an insurance payout. Personal-injury compensation is protected without limit.

How quickly does the FSCS pay out?

The FSCS aims to pay deposit compensation within seven working days of a bank failing, automatically, using the bank's own records. Temporary high balance claims can take up to three months.

Are savings apps and platforms FSCS protected?

The platform itself is not. Money it places with a regulated partner bank is protected under that bank's licence, together with anything else you hold with the same bank.

Is Wise covered by the FSCS?

No. Wise is an e-money institution, not a bank, so balances are safeguarded rather than FSCS-protected. The same applies to PayPal balances and prepaid cards.