By Chandraketu Tripathi · Updated April 2026 · Fact-checked Finance · April 2026The Financial Services Compensation Scheme (FSCS) is the UK's statutory deposit protection scheme. If your bank, building society or credit union fails, the FSCS guarantees to return your eligible deposits up to £85,000 per person per authorised institution within 7 business days. Understanding exactly what this covers is essential for anyone with significant savings.
What Does the FSCS Protect?The FSCS protects deposits held in current accounts, savings accounts, cash ISAs and fixed rate bonds with UK-authorised banks, building societies and credit unions. The limit is £85,000 per person per banking licence — not per account or per product. Importantly, many well-known banking brands share a single banking licence. Halifax, Bank of Scotland and Intelligent Finance are all part of Lloyds Banking Group — your combined FSCS protection across all three is £85,000, not £85,000 each. Similarly, First Direct and HSBC share a licence (with a higher £120,000 limit due to HSBC's specific FSCS designation). 💡 Check which banking group owns each provider before spreading savings across multiple accounts. Useful combinations for splitting over £85,000: Lloyds/Halifax/BOS share one licence, NatWest/RBS share one licence, HSBC/First Direct share one licence (£120,000), Santander has its own licence. What is NOT Protected by FSCS?The FSCS does not protect you against investment losses from market movements — if your stocks and shares ISA falls in value, FSCS does not compensate you. It does protect against losses caused by a firm going bust (up to £85,000) or giving you negligent advice. Crypto assets are not FSCS-protected. Savings with banks not authorised in the UK are not protected. Temporary High Balance ProtectionIf you receive a large sum from specific events — selling a property, receiving an inheritance, insurance payout, divorce settlement or redundancy — your FSCS protection temporarily rises to £1,000,000 for 6 months from receipt. After this period, you revert to the standard £85,000 limit. Act within 6 months to spread funds across multiple FSCS-protected institutions if your balance exceeds £85,000. ⭐ OUR VERDICT The FSCS provides a robust safety net for UK savers with up to £85,000 per banking licence. For those with more than £85,000 to save, spreading funds across multiple separate banking groups — not just different brands — is essential. Joint accounts double the effective limit to £170,000 per institution. For temporary large balances from property sales or inheritance, act within the 6-month window to restructure your savings across multiple protected institutions. Frequently Asked QuestionsIs my cash ISA FSCS protected? Yes. Cash ISA deposits are included in the £85,000 FSCS protection limit alongside your other deposits with the same banking group. The ISA status does not provide additional protection — the total across all accounts with the same banking licence is capped at £85,000. What happens if a bank fails? The FSCS aims to return eligible deposits within 7 business days of a bank failure. In practice, the FSCS may arrange for your deposits to be automatically transferred to another bank rather than paying you directly. You would typically have uninterrupted access to your money within a week. Are Premium Bonds FSCS protected? Premium Bonds are issued by NS&I (National Savings & Investments), which is backed directly by HM Treasury rather than the FSCS. Your money is effectively guaranteed by the UK government with no upper limit — making NS&I one of the safest places to hold savings above £85,000. Does the FSCS protect savings with challenger banks like Monzo and Starling? Yes. Monzo and Starling are both fully licensed UK banks, regulated by the FCA and PRA. Your deposits are FSCS-protected up to £85,000 per person — the same as any major high street bank. |
Part of our complete guide:
UK Inheritance Tax 2026 - Complete Guide →
Find a regulated IFA → | Make a will online from £29.99