Bank of England’s Prudential Regulation Authority increases FSCS deposit protection limit to GBP 120,000 from 1 December

The Bank of England’s Prudential Regulation Authority (PRA) has confirmed that the Financial Services Compensation Scheme (FSCS) deposit protection limit will rise to GBP 120,000 per depositor if a bank, building society or credit union fails, effective from 1 December 2025. The PRA also confirmed that the limit for certain temporary high balance claims will increase from GBP 1 million to GBP 1.4 million from the same date. The new GBP 120,000 limit replaces the current GBP 85,000 cap set in 2017 and is higher than the PRA’s earlier proposal of GBP 110,000, reflecting consultation feedback and updated inflation data. HM Treasury has approved the change. The deposit protection limit applies per depositor, per PRA-authorised institution, and the applicable limit is the one in force at the time of the firm’s failure; temporary high balance protection is linked to qualifying life events such as residential property transactions and insurance payouts. To support the revised limits, the PRA has updated FSCS disclosure materials, including the depositor information sheet and branch disclosures, which firms must update by the end of May 2026.