From 1st December 2025, the Financial Services Compensation Scheme (FSCS) protection limit will increase from £85,000 to £120,000 per person, per authorised firm. The increase in the limit is long overdue as it has not been increased since it was introduced in 2011!
The Temporary High Balance (THB) limit will also rise from £1 million to £1.4 million. This applies if your account has a temporary high balance because of a qualifying life event, such as the proceeds of a house sale, a redundancy payment or benefits that were paid when you retired. FSCS can protect temporary high balances in your bank, building society or credit union account of up to £1m for six months.
As before NS&I accounts maintain a 100% deposit security advantage but with interest rates now expected to fall a little savers will be keen to shop around.
These changes are intended to restore the real value of protection and strengthen confidence in the UK banking system although the increase does still not keep pace with inflation over the period.
For clients with significant deposits (typically in excess of £250,000), and who are happy online, we can provide access to the Insignis cash platform which allows you to spread deposits across institutions with a range of instant access or fixed term deposits all under one roof.
Holding a solid foundation of cash is a key cornerstone of our investment process allowing clients to take a longer term view with their invested capital as investments can of course go up and down and returns are not guaranteed.
As always please do speak to your usual FPC adviser for further guidance on managing your cash reserves.