How much of your savings is protected if a bank fails, and the shared-licence catch

Bank failures are rare, and most savers never give them a thought. But the protection that exists if one does happen has a limit, and that limit is counted in a way that surprises people: not per account, and not always per brand.

On 1 December 2025 the Financial Services Compensation Scheme (FSCS) raised its deposit protection limit from £85,000, where it had stood since January 2017, to £120,000. It applies per eligible person, per authorised bank, building society or credit union. This guide explains what that means in practice, including the shared-licence rule and the extra cover for large one-off sums.

What the FSCS covers

The scheme protects money held with a UK-authorised bank, building society or credit union. If such a firm fails, the FSCS compensates eligible depositors up to the limit. For ordinary deposits you do not need to apply; the FSCS pays automatically, and it aims to do so within seven working days of the failure. More complex claims, including temporary high balances, take longer and need an application.

The limit is for each person at each firm, not for each account. Three savings accounts and a current account at the same bank share the one £120,000.

Joint accounts

Joint accounts are protected up to the same limit for each eligible account holder. A joint account held by two people is therefore covered up to £240,000 in total, with each person's share counted towards their own £120,000 at that firm, alongside any accounts they hold there on their own.

The shared-licence catch

Banking groups often run several brands. Where those brands operate under one banking licence, the FSCS treats them as a single bank. Your money across all of them is added together and protected up to one £120,000 limit, however many different names appear on your statements. The Financial Services Register shows which brands share a licence, and many banks state it on their own websites.

Spreading savings across brands that look separate but share a licence can leave more uncovered than you expect.

Temporary high balances

Some life events leave people with far more in an account than usual for a short time: the proceeds of a home sale before the next purchase, for example, or a redundancy payment. The FSCS protects certain qualifying balances like these up to £1.4 million for six months from when the money was first deposited. These claims are not paid automatically; you contact the FSCS for an application form and show where the money came from. If you are about to receive a large sum, it is sensible to keep the paperwork that explains it.

What is outside the deposit limit

• Premium Bonds and other NS&I products are not covered by the FSCS because NS&I is backed by HM Treasury. We compare them with bank savings in our Premium Bonds article.
• Firms not authorised in the UK, including some savings platforms' partner banks based abroad, may fall under another country's scheme with different limits. Check before you deposit.
• Investments such as shares and funds have separate FSCS rules and do not protect you against a fall in value.

How to check your own position

1. List every account you hold, including easy-access, notice, fixed-term and cash ISA accounts, and the institution behind each brand.
2. Use the FSCS online checker or the Financial Services Register to see which brands share a licence.
3. Add up your money per licence, counting your share of joint accounts.
4. If any total is above £120,000, consider whether that is a risk you are comfortable with, especially for money you are holding only briefly.

Who this matters for, and what to check

Most savers are well within the limit. It matters for people who have just sold a home, received an inheritance or a lump sum, or keep most of their savings with one group. It also matters when interest rates tempt savers towards several accounts that turn out to be the same bank underneath. Interest on large balances can also become taxable, as we explain in our article on frozen thresholds, and an inherited sum may come with its own tax history; see our guide to Inheritance Tax.

The takeaway

The FSCS limit is now £120,000 per person per authorised firm, not per account and not necessarily per brand. A few minutes with the FSCS checker shows whether any of your money sits above it. Large one-off sums have extra protection for six months, but only if you claim it. The FSCS is free and you never need to pay anyone to make a claim on your behalf.