Savers across the UK could soon benefit from stronger financial safeguards, as plans have been unveiled to increase the amount of savings protected if a bank or building society collapses.
The Prudential Regulation Authority (PRA) has proposed raising the Financial Services Compensation Scheme (FSCS) limit from £85,000 to £110,000 per person, per institution. The change would reflect inflation since the limit was last set in 2017 and is designed to bolster public confidence in the UK’s banking system.
The proposal is currently open to consultation, but if approved, the increased protection would come into effect from 1 December 2025. For joint account holders, the limit would double to £220,000.
Rob Mansfield, independent financial adviser at Rootes Wealth, called the move “great news for savers and for confidence in our banking system”, praising the alignment with inflation.
The FSCS, which has paid out more than £20bn to savers since its inception—much of it following the 2008 financial crisis—also backs temporary high balance claims. These cover instances like house sales or large insurance payouts, where savers might briefly hold more than the usual limit. Under the new proposals, that cap could rise from £1m to £1.4m.
Sam Woods, chief executive of the PRA, emphasised that customer trust in the financial system is a “fundamental foundation for economic growth”. His comments echo the government’s call for regulators to ensure their policies support wider economic development.
Rocio Concha, director of policy and advocacy at Which?, welcomed the plans, describing the decision as “sensible” and adding that “strong consumer protections and economic growth go hand in hand”.
The consultation forms part of a broader review into how savings are protected in the UK, and how to ensure those protections remain relevant in a fast-evolving financial landscape.
