Prudential Regulation Authority finalises depositor protection reforms raising the FSCS limit to GBP 120,000 and temporary high balance cap to GBP 1.4 million

The Prudential Regulation Authority published a policy statement finalising changes to the UK depositor protection framework, including higher compensation limits under the Financial Services Compensation Scheme and associated updates to its Rulebook and guidance. The package also confirms implementation requirements for firms’ systems and depositor disclosures. The standard FSCS deposit protection limit will rise from GBP 85,000 to GBP 120,000 and the limit for certain temporary high balance claims will rise from GBP 1 million to GBP 1.4 million, applying to firm failures occurring on or after 1 December 2025. Firms must update single customer view systems to reflect the new limit from 1 December 2025 and complete updates to disclosure materials and deposit compensation information by 11.59pm on 31 May 2026. Amendments to the Depositor Protection Part include clarifying requirements for third-party premises, exempting branches that do not deal with depositors in person from displaying the FSCS sticker and poster, updating information sheet wording (including accessibility-related changes), and renaming the relevant chapter to cover electronic communications; Supervisory Statement 18/15 is updated to clarify expectations (including on “without delay”) and to add guidance on third-party premises, alongside other clarifications. HM Treasury has approved the change in the deposit protection limit. The FSCS will make supporting information available on its website to help firms implement the new limits and information requirements.