What is the FSCS and how does it protect your savings?
If you have money in a UK bank or building society, it is probably protected by the Financial Services Compensation Scheme (FSCS). But most people don't fully understand how this protection works — and that can lead to nasty surprises if a bank fails.
The basics: £120,000 per person, per institution
The FSCS protects up to £120,000 per person, per authorised institution. This limit was raised from £85,000 to £120,000 in December 2025, reflecting inflation and strengthening consumer protection.
If you have a joint account, each account holder is covered for £120,000 — so a joint account has effective protection of £240,000.
The shared licence problem
This is where many savers get caught out. Some banking brands share a single banking licence, which means the £120,000 limit is shared across all brands under that licence — not per brand.
Always check the FSCS website or your provider before saving over £120,000 with related brands. Licences change over time.
If you hold £80,000 with Halifax and £80,000 with Bank of Scotland, both in the Lloyds Banking Group, your total protection is still only £120,000 — not £160,000. The excess £40,000 is unprotected.
Temporary high balance protection
There is a special provision for temporary high balances — large sums that arrive in your account from life events such as:
- Sale of a property
- Inheritance receipt
- Insurance payout
- Redundancy settlement
- Personal injury compensation
In these cases, you can be protected up to £1 million for six months from the date the funds arrive. After six months, the standard £120,000 limit applies. Keep evidence of where the money came from in case a claim is needed.
What is and isn't covered
What to do if you have more than £120,000 to save
Spreading savings across multiple authorised institutions (not just brands) ensures each pot is within the protected limit. The Savings Finder shows products from a range of providers so you can identify separate institutions and manage your FSCS exposure across them.
NS&I products — Premium Bonds, savings accounts, and bonds offered by National Savings & Investments — are backed directly by the UK government and have no compensation limit. Any amount is fully protected. This makes NS&I particularly attractive for very large cash holdings.
Watch out for shared banking licences
This is where it gets tricky. Some banking groups operate several brands under a single licence. For example:
- Lloyds Banking Group: Lloyds, Halifax, Bank of Scotland, Scottish Widows
- NatWest Group: NatWest, RBS, Ulster Bank
- HSBC Group: HSBC, First Direct, M&S Bank
If you have £70,000 in Lloyds and £70,000 in Halifax, you have £140,000 with one authorised institution — only £120,000 is protected.
How to check your protection
The FSCS maintains a full list of protected firms and their authorisation status. You can search for any provider at fscs.org.uk.
When checking, look for the firm reference number — if two brands share the same FRN, they share the same protection limit.
What about temporary high balances?
If you've recently received a large sum — like a house sale, inheritance, or redundancy payment — you may qualify for temporary high balance protection. This extends cover to £1.4 million for up to six months.
Qualifying events include: property sale proceeds, inheritance, divorce/separation settlements, redundancy, and personal injury compensation.
Practical steps if you have more than £120,000
If your savings exceed the protection limit, consider:
- Spread your money across multiple authorised institutions (not just brands)
- Use NS&I — 100% government backed with no upper limit
- Build or top up your in a separate easy-access account so day-to-day money stays protected independently
- Consider fixed-term accounts at different providers — the lists FSCS-protected options filterable by type and term