Financial Services Compensation Scheme (FSCS)
FSCS protection is a safety net for eligible deposits, but the limit, product type and banking licence all matter.
In this guide
The Financial Services Compensation Scheme protects eligible deposits up to £120,000 per person, per authorised bank, building society or credit union if the firm fails.
Key terms used in this guide5 terms
Definition
FSCS
The Financial Services Compensation Scheme, the UK's statutory compensation scheme for eligible customers of authorised financial services firms.
Learn more about fscsWhat is FSCS?
FSCS is the UK's compensation scheme for eligible customers of authorised financial services firms. For cash savers, it is the backstop if a UK-authorised deposit taker fails.
FSCS is a financial safety net rather than cover for every loss. Compensation is available only when the customer and product meet the scheme's eligibility rules.
- 1
Your firm fails
A UK-authorised bank, building society or credit union cannot return customers' money.
- 2
FSCS steps in
The scheme pays compensation to eligible customers instead of the failed firm.
- 3£120,000
Protection applies
The standard limit, per eligible person, per authorised firm.
FSCS was set up by Parliament and operates independently. Its service is free to consumers, while authorised financial services firms fund it through an industry levy.
What does FSCS cover?
Different product types have different protection limits and rules. Do not assume every product from a familiar brand is covered in the same way.
| Product | Protection limit | Watch out |
|---|---|---|
| Cash deposits | Protection limit£120,000per person, per authorised firm | Watch out Shared banking licences can combine balances across brands, so check the firm behind the name. |
| Joint deposits | Protection limit£240,000usually, for two eligible people | Watch out The authorised firm still matters. A couple with £300,000 in joint accounts at one firm would have £60,000 above the limit. |
| Temporary high balances | Protection limit£1.4 millionfor up to six months after certain life events | Watch out Only qualifying events count, such as selling a main home, inheritance, redundancy or certain compensation payments. |
| Investments | Protection limit£85,000for eligible claims if a firm fails | Watch out FSCS does not cover normal investment losses caused by market movements. This limit is separate from the cash deposit limit. |
What does FSCS not cover?
FSCS protects specific products at authorised firms. A familiar brand does not guarantee that a product is covered, so check what you actually hold.
These are not covered:
E-money accounts and payment apps
These are not protected like a bank deposit. They rely on safeguarding rules, which keep customer money separate from the firm's own. Some brands offer both a bank account and an e-money account, so check which one you hold.
Peer-to-peer lending
Money lent out through a platform is not covered. Cash waiting to be lent may be protected if it is held at a UK bank.
Cryptoassets
Not covered, and most crypto products sit outside the scheme altogether.
Banks not authorised in the UK
These may rely on their home country's scheme instead, which can have different limits and rules.
Savings across multiple banks
For savings, the most common mistake is assuming the limit applies to every brand name separately. It applies per authorised firm. If two brands share the same authorisation, your eligible balances across both may count towards one limit.
Separate authorised firms
£150,000 split across two firms
The balances have separate limits. Because each brand uses a different authorised firm, both balances could be fully protected if eligible.
Same authorised firm
The same £150,000 across two brands
The balances share one limit. Because both brands use the same authorised firm, £30,000 may sit above standard protection.
Same £150,000, different protection
What matters is the authorised firm behind the brand, not the name on the app. Check the firm name and FCA Register entry before you split your savings.
Temporary high-balance protection
Temporary high-balance protection can apply when a qualifying life event leaves you with a large short-term cash balance, such as proceeds from selling a main home, redundancy, inheritance or certain compensation payments.
The standard temporary high-balance limit is up to £1.4 million for six months. Keep evidence of where the money came from and when it became legally yours, because the protection depends on the circumstances.
Do not assume it renews. Moving money between accounts does not usually restart the six-month temporary high-balance period. Check the FSCS rules for your situation.
How to check whether your savings are protected
Check protection before you deposit a large balance. The process is quick, and it matters most when you use multiple brands or hold more than £120,000 in cash.
- 1
Check the product type
Confirm whether it is a deposit account, investment, e-money account or another product type.
- 2
Find the authorised firm
Use the FSCS checker or FCA Register to identify the authorised firm behind the brand.
- 3
Add balances under that firm
Combine eligible deposits held under the same authorised firm before comparing with the limit.
- 4
Split if needed
If a balance is above the protected amount, consider spreading cash across separately authorised firms.
FSCS protection calculator
Add savings balances across banks or brands to see how shared authorised firms can affect the illustrated FSCS cover, or open the standalone calculator.
Inputs
Add each balance, then group brands that share the same authorised firm or banking licence.
Protection limit
Savings balances
The bottom line
FSCS protection is strongest when you know the product type, the authorised firm and the relevant limit.
For cash savings, remember the practical rule: £120,000 per eligible person, per authorised firm, with special short-term rules for qualifying temporary high balances.
