PRA considering raising deposit protection limit to £110,000

The limit, which represents the amount of money the FSCS protects should a depositor’s bank becomes insolvent, has been set at £85,000 since 2017. If taken forward, the new limit would apply to firms from the start of December this year.  

Sam Woods, deputy governor for Prudential Regulation and chief executive of the PRA, said: “Confidence in our financial system is an essential foundation for economic growth.  

“We want to support confidence in our banks, building societies and credit unions by raising the amount that people can keep in their account which is covered by the deposit guarantee scheme to £110,000 per person, so all that money is safe even if the firm fails.” 

Which? director of policy and advocacy Rocio Concha added: “Raising the deposit protection limit is a sensible decision to support consumer confidence in the financial service industry.  

“At a time when the government and regulators are going for growth, this decision is a reminder that strong consumer protections and economic growth go hand in hand.” 

This change forms part of a wider-ranging consultation on deposit protection from the FSCS, which also includes an increase in the limit applicable to certain temporary high balance claims – such as used for qualifying life events like buying or selling a house and payouts from insurance policies – from £1m to £1.4m from 1 December 2025. 

Alongside this, it’s looking to introduce the rules needed to facilitate the Bank Resolution (Recapitalisation) Bill. This proposes a new resolution tool enabling industry funds provided via the FSCS to be used to recapitalise a failing firm to either support its sale or transfer to a bridge bank.  

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