Changes to the UK’s deposit protection limit – here’s everything you need to know

From 2016, the amount of your money that will be protected from bank failure under the deposit protection scheme will fall by £10,000. Natalie Stanton examines the changes.


From 31 December, the total protected per person in any one bank will fall to £75,000

As of 31 December 2015, there's a chance that a substantial chunk of your savings will no longer be safe in the bank. That's due to new changes to the Financial Services Compensation Scheme (FSCS) the UK's compensation fund which pays out to customers if their bank goes under. Here we'll outline what's new, and what these changes mean for your money.

What is changing?

The Prudential Regulation Authority is required to review the deposit protection limit every five years, although it intervened periodically throughout the financial crisis. In October 2007, it extended its policy to protect the first £35,000 per bank customer. The following year at the height of the financial crisis it increased this total to £50,000. And in January 2011, it rose again to the current total of £85,000.

If you hold a joint account with your partner, you will be entitled to £75,000 each. So, from next year, joint deposits of up to £150,000 will be protected if your bank falls into difficulties.

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One final change is that savers with temporarily high balances usually due to selling or buying a home will now be covered up to a limit of £1m.

Why are the changes being made?

Compared to most currencies, sterling has enjoyed a particularly strong 2015 so far particularly in light of uncertainty sparked by the prospect of a potential Grexit.

Will your money still be protected?

Another thing to keep in mind is that some banks share a banking licence. For example, the Bank of Ireland falls under the same umbrella as the Post Office. Halifax shares a licence with Bank of Scotland, while HSBC shares with First Direct. If you hold more than £75,000 in one group, your money may not be covered. (See a list of the main shared licences at the FSA website).

Do remember that the changes don't take effect until 31 December 2015. You'll have until then to ensure that your finances are in order.

Natalie joined MoneyWeek in March 2015. Prior to that she worked as a reporter for The Lawyer, and a researcher/writer for legal careers publication the Chambers Student Guide. 

She has an undergraduate degree in Politics with Media from the University of East Anglia, and a Master’s degree in International Conflict Studies from King’s College, London.