What you need to know about FSCS protection limit increase

The Prudential Regulation Authority (PRA) has increased the Financial Services Compensation Scheme (FSCS) deposit protection limit from £85,000 to £120,000 as of today; 1 December 2025. This change reflects the rising cost of living and aims to better safeguard savers’ money in the UK.

What Is the FSCS?

The FSCS protects individuals’ eligible deposits if their bank, building society or credit union fails. It’s a cornerstone of financial safety in the UK, offering automatic compensation up to a set limit with no need to claim.

Previously, this limit was £85,000 per organisation, per UK-authorised firm. This has increased to £120,000, enhancing this coverage significantly. For personal customers, those with joint accounts will be protected up to £240,000 with each account holder covered up to the individual limit.

Why Is the limit increasing?

According to the Bank of England, the rise reflects:

• Inflation since the limit was last set in 2017.

• The need to maintain public confidence in the UK’s financial system.

The new limit will help ensure the FSCS remains effective in protecting real value in today’s economy.

What this means for Redwood Bank customers

Most business savings customers qualify, but exclusions do apply for public authorities and financial institutions. Further information is available from the FSCS or you can read their guide.

You don’t need to take any action. FSCS protection is automatic and free.

Redwood Bank is fully covered by the FSCS, so your eligible deposits are secure.

What should you do now?

No immediate steps are needed, but this is a great opportunity to:

• Review your savings across different institutions.

• Understand how FSCS coverage applies, especially if you hold over £85,000 in a single institution.

Please read our FAQs, or contact us if you have questions about your FSCS protection.