Understanding
FSCS Protection

The Financial Services Compensation Scheme (FSCS) is the UK's official deposit protection scheme. It protects eligible deposits held with banks, building societies, and credit unions that are authorised by the PRA and regulated by the FCA.

If a regulated bank fails and cannot return your money, the FSCS compensates eligible customers up to £120,000 per person, per authorised institution. In most bank failures, eligible depositors are compensated automatically, usually within 7 working days.

FSCS only applies to firms that hold a full UK banking licence. Not all financial apps or money providers qualify, which is why it is important to understand whether your provider is a bank or an e-money institution.

The Financial Services Compensation Scheme (FSCS) exists to protect consumers and maintain confidence in the UK financial system. If an authorised bank, building society, or credit union becomes insolvent, the FSCS ensures eligible depositors do not lose protected savings.

By guaranteeing compensation up to £120,000 per person, per authorised bank, the scheme reduces the risk of panic withdrawals during financial stress. This protection plays a critical role in financial stability and prevents wider disruption to the banking system.

FSCS is funded by levies on authorised financial firms, not by taxpayers, and operates independently under UK financial regulation.

The FSCS protects eligible deposits up to £120,000 per person, per authorised bank. This means each individual has their own separate protection limit at each licensed institution.

For joint accounts, the limit applies to each named account holder. A two-person joint account can therefore be protected up to £240,000 in total.

The protection limit applies per authorised banking licence, not per brand. If two banking brands operate under the same licence, your combined deposits across both count toward a single £120,000 per-person limit.

If you hold more than £120,000 with one authorised bank, any amount above the limit may not be protected.

In certain circumstances, FSCS protection can temporarily exceed the standard £120,000 limit. This is known as Temporary High Balance protection.

Qualifying events can include the sale of a main home, inheritance payments, insurance payouts, compensation awards, divorce settlements, redundancy payments, or certain benefits received from the government.

Eligible temporary high balances can be protected up to £1.4 million for up to six months from the date the money is deposited or becomes legally payable.

If you receive a large one-off payment, it is worth checking whether Temporary High Balance protection applies and considering spreading funds across multiple authorised institutions if appropriate.

Both digital banks and high street banks that hold a full UK banking licence are covered by FSCS protection.

Fully licensed digital banks include Monzo, Starling Bank, Atom Bank, Zopa Bank, Kroo, and Chase UK. Fully licensed high street banks include Barclays, Lloyds Bank, NatWest, HSBC, Santander, Nationwide, Halifax, and TSB.

However, not all financial providers are banks. Some operate as e-money institutions rather than deposit-taking banks, meaning they are not FSCS protected.

You can compare licensing status, FSCS coverage, savings features, and fees for both bank types in our digital banks guide and high street banks guide.

FSCS protection applies to fully authorised UK banks. If the bank fails, eligible deposits are protected up to £120,000 per person, per authorised firm.

Safeguarding is used by e-money institutions rather than banks. These firms must keep customer funds in separate, ring-fenced accounts.

However, safeguarding is not the same as deposit protection. There is no £120,000 compensation guarantee under safeguarding.

If a UK bank with FSCS protection collapses, the Financial Services Compensation Scheme automatically steps in to protect eligible deposits up to £120,000 per person, per authorised bank.

In most cases, compensation is paid within 7 working days. The process is automatic.

If you hold more than the protection limit at that institution, any amount above £120,000 may be at risk.

A joint account receives up to £120,000 protection per account holder, per authorised bank.

This means a two-person joint account can be protected up to £240,000 in total at a fully licensed UK bank.

However, the limit applies per authorised banking licence, not per brand.

Below is a summary of FSCS coverage for major UK digital and high street banks.

For a full breakdown of licensing status, savings features, fees, and protection levels, see our bank comparison guides.

Always double-check with the provider and the FCA register before depositing large sums.

Check the FCA Financial Services Register to confirm whether the firm has a UK banking licence.

Look for the phrase: 'This firm is authorised by the PRA and regulated by the FCA.'