The amount of a customer\u2019s money protected if a UK bank or building society goes bust will rise to \u00a3120,000 next month, providing a boost to the nation\u2019s savers.<\/p>\n
The new deposit protection limit, a 41% rise from the current limit of \u00a385,000, is higher than expected and takes effect on 1 December.<\/p>\n
The original plan was that UK savers would have up to \u00a3110,000 of their deposits protected<\/a> if their bank, building society or credit union went out of business. However, it appears this is one of the rare areas where consumers are benefiting from the fact that UK inflation \u2013 currently 3.8%<\/a> \u2013 is higher than officials and the government would like it to be, at nearly double the 2% target<\/a>.<\/p>\n Announcing the new rules, the Bank of England\u2019s regulatory arm, the Prudential Regulation Authority, said the proposed new limit of \u00a3110,000 had been increased \u201cin light of consultation feedback and to reflect the latest inflation data\u201d.<\/p>\n It is the first increase in the limit for eight years and means that, from 1 December, if a UK-authorised bank, building society or credit union goes out of business, the official Financial Services Compensation Scheme (FSCS) will compensate eligible customers up to the new limit of \u00a3120,000, which is per person and per firm.<\/p>\n Customers will typically get their money back within seven days of a lender going out of business.<\/p>\n As expected, the amount of protection for \u201ctemporary high balances<\/a>\u201d \u2013 where someone can suddenly see a large amount land in their bank account because of a significant life event such as selling their house or receiving an inheritance or insurance policy payout \u2013 is also being increased, from \u00a31m to \u00a31.4m.<\/p>\n The FSCS protects temporary high balances for up to six months, and other eligible life events can include receiving a retirement, redundancy or personal injury payout. However, money received from selling a second home or a buy-to-let property is not covered by those rules \u2013 it has to be someone\u2019s \u201cmain residence\u201d.<\/p>\n The higher deposit guarantee limit may encourage some well-off consumers to stash more of their money in savings accounts \u2013 which could be viewed as contrary to what the government would like.<\/p>\n The new level will be introduced five days after the budget, when Rachel Reeves, the chancellor, could reduce the amount that people can put into cash Isa accounts.<\/p>\n skip past newsletter promotion<\/a><\/p>\n Sign up to Business Today<\/p>\n Get set for the working day \u2013 we’ll point you to all the business news and analysis you need every morning<\/p>\n Privacy Notice: Newsletters may contain information about charities, online ads, and content funded by outside parties. If you do not have an account, we will create a guest account for you on theguardian.com<\/a> to send you this newsletter. You can complete full registration at any time. For more information about how we use your data see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n For months there has been speculation that she may cut tax breaks on cash Isas<\/a> in her budget on 26 November in order to encourage more people to put money into the stock market, and in particular British companies, as part of the government\u2019s mission to boost economic growth.<\/p>\n Concerns about what might happen in the budget have been cited as one of the reasons why savers are piling billions of pounds into savings every month. The latest Bank of England data<\/a> showed that in September alone, \u00a35.8bn poured into easy access accounts, while an extra \u00a32.4bn went into cash Isas.<\/p>\n That said, millions of people in the UK will never have to worry about having more in savings than is protected by the FSCS limit. In 2024, about 10% of UK adults had no cash savings whatsoever, while for the 90% who did, the median amount held was between \u00a35,000 and \u00a36,000, according to a report issued earlier this year by the Financial Conduct Authority. Another survey<\/a> found that the average person in the UK has \u00a316,067 in savings in 2025.<\/p>\n Sam Woods, the PRA chief executive, said the new maximum limit \u201cwill help maintain the public\u2019s confidence in the safety of their money\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"The amount of a customer\u2019s money protected if a UK bank or building society goes bust will rise…\n","protected":false},"author":2,"featured_media":268819,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[49,50,51,47,52,48],"class_list":{"0":"post-268818","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-headlines","8":"tag-headlines","9":"tag-news","10":"tag-top-news","11":"tag-top-stories","12":"tag-topnews","13":"tag-topstories"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/268818","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=268818"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/268818\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/268819"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=268818"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=268818"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=268818"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}