There was great news for savers last week when the Prudential Regulation Authority (PRA) confirmed that that the deposit guarantee limit provided by the Financial Services Compensation Scheme (FSCS) is increasing on the 1st December 2025 to £120,000 for qualifying single accounts and £240,000 for qualifying joint accounts.
Why is this important?
For many of us, savings are about security and it’s important to know that if our bank or building society hits trouble, that our funds are safe. That’s where the FSCS comes in. When you place money with a UK-authorised bank, building society or credit union, if they fail, the FSCS automatically picks up the bill for compensation up to the deposit guarantee limit per eligible person, per authorised firm. By increasing the limit from £85,000 to £120,000 per eligible person, savers have £35,000 more protection on deposits they have with every authorised savings provider.
In addition, the FSCS provides protection for a much higher amount for so-called “Temporary High Balances”, useful after selling a property or receiving an inheritance for example. This cover, which also increases from £1m to £1.4m, gives you up to six months to arrange where to save or invest this money. This useful extra time gives you breathing space to get advice or do your own homework before deciding where to save or invest your money.
Do accounts with all banks and savings providers offer the same cover?
This is a vital point. Not all accounts are treated separately under the FSCS. It’s per person, per authorised firm and banking licence. For example, some banks share the same UK banking licence across multiple brand names. If you have savings across two brands that share one licence, your total protection will still be the single-firm limit of £120,000 per individual across all the accounts you have with those connected brands.
To give you an example, Halifax, Bank of Scotland, Intelligent Finance and Bank of Scotland Private Banking all share the same banking licence. What that means is that if you had more than £120,000 spread across accounts with one or more of those deposit brands, you would only be covered by the FSCS up to £120,000 in total if all four were to fail.
Also, bear in mind there are providers that are not covered at all by the FSCS for deposit protection. Some e-money institutions including fintech firms and payment apps that hold your money as “safeguarded funds” rather than deposits, are not covered by the FSCS. Also, if a provider is a branch of a foreign bank and isn’t UK authorised, then different schemes may apply or there may be no equivalent scheme at all.
Does United Trust Bank have its own banking licence?
Yes, UTB has its own banking licence, and it’s not shared with any other bank or organisation. This means any money you save with us is protected by the FSCS up to the deposit guarantee limits . At present that’s £85,000 per individual and £170,000 for joint accounts, and from the 1st of December that increases to £120,000 per individual and £240,000 for joint accounts.
It’s a good idea to check what banks, building societies and other savings providers have or share a banking licence, and the Bank of England has compiled a handy list which you can find here.
Peace of Mind
The increased deposit protection limit is welcome news for savers. It restores more value to the guarantee, which has been the same since 2017, and gives you greater peace of mind. But don’t assume that just having several different accounts with different providers gives you extra cover. Check whether the banking or deposits brand you’re with uses a separate banking licence. And if you’re using a newer digital/finnovator firm, double-check that your funds are held in a UK-authorised deposit-taking institution. A little homework now helps ensure you know what protection you really have in the future.
Although this article may contain helpful information and tips, these are not personal advice. You may wish to seek advice from a financial advisor if you are unsure what’s best for your own personal circumstances.