FSCS protection: Is your money safe?
When you’re looking for a new home for your savings, peace of mind is just as important as a good interest rate. That’s where the Financial Services Compensation Scheme (FSCS) comes in.
The FSCS is a free, independent service that protects your money if a UK-regulated bank, building society or credit union fails.
This guide explains what FSCS protection is, how much of your savings may be covered, and what you may need to do if something goes wrong.
| FSCS protection at a glance* | |
|---|---|
| Individual account limit | £120,000 per person, per financial institution |
| Joint account limit | Covered up to £240,000 per joint account (£120,000 per person) |
| Temporary high balances | Up to £1.4 million for major life events (e.g. house sale) up to six months |
| Costs to savers | Free – you don't pay to be protected |
What is FSCS protection and how does it work?
The Financial Services Compensation Scheme is a free, independent service funded by the financial services industry. It exists to protect you if a firm goes out of business and cannot return your money. You can claim for lost savings up to £120,000 per person, per authorised institution, with the Financial Services Compensation Scheme.
FSCS protection is automatic – you don’t need to sign up or pay a fee. If your bank or building society fails and holds eligible deposits, the FSCS will aim to repay you up to the protection limit within seven working days for most straightforward cases.
Takeaway: The FSCS offers financial security by protecting your savings. If your regulated bank fails, the FSCS may repay eligible funds up to £120,000 per person, per institution.
Who is covered by FSCS?
FSCS protection is available to most individuals who hold money with a Financial Conduct Authority (FCA) or Prudential Regulation Authority (PRA) authorised firm. This includes:
- Private individuals (including children)
- Joint account holders (each person is protected separately up to the limit)
- Small businesses and sole traders, in some circumstances
- Charities and trusts below certain asset thresholds
Good to know: The FSCS is designed to protect individuals and small businesses. Large corporations, government bodies, and firms that aren't fully authorised by UK regulators are usually not covered. Always check that your provider is a fully authorised bank or building society.
Banking groups and shared licenses
The FSCS applies to organisations regulated by the Financial Conduct Authority, and most UK-authorised banks are fully protected, meaning eligible deposits are covered if the financial firm fails.
This is one of the most important (and most commonly misunderstood) aspects of FSCS protection. If two banks operate under the same banking licence (even if they trade under different names), your combined savings across both will only count once towards the £120,000 FSCS protection limit.
Tip: Before opening a second account, it’s worth checking whether the new provider holds a banking licence that’s shared with the one you already use.
Digital banks and money apps
Not all apps that hold your money are covered by FSCS protection.
Some fintech apps, such as e-money institutions and prepaid card providers, are not covered by FSCS protection. Instead, they’re required to safeguard customer money by keeping it separate from the company's funds. However, safeguarding offers a degree of protection, but it’s not the same as FSCS cover, and the process for recovering money can be slower and less certain.
Good to know: Always check whether an app or digital money account is FSCS-protected before depositing significant funds. You can verify if your money is protected by using the FSCS protection checker on their official website.
How much of your savings is protected in 2026?
The current FSCS protection limit is £120,000 per person, per authorised financial institution. This limit applies to your total deposits with that institution, across all accounts held with them.
If you hold more than £120,000 with a single institution, any amount above that limit may not be protected. To maximise your FSCS coverage, you may wish to spread larger sums across multiple authorised providers, making sure each provider operates under a separate banking licence.
Good to know: Your savings are now protected up to £120,000 per eligible person, per firm. This limit came into effect on 1 December 2025, replacing the old £85,000 threshold.
Which savings types are (and aren't) covered by the FSCS?
What is covered (the £120,000 limit)
The following types of deposits and savings products may be covered by FSCS protection:
- Easy access savings accounts
- Fixed-rate bonds and fixed-term deposits
- Notice accounts
- Cash ISAs
- Current accounts and bank deposits
- Children's savings accounts
- Business savings accounts for small businesses
What has "unlimited" protection?
Certain major life events may temporarily entitle you to a higher level of protection for six months – typically up to £1.4 million, but in some cases, unlimited. FSCS refers to this threshold as “temporary high balances”. It may apply to:
- Proceeds from the sale of a property
- Inheritances or estate distributions
- Personal injury compensation
- Redundancy pay
- Proceeds from a divorce
What is not covered by the FSCS?
Not everything is protected. The following are generally not covered by FSCS:
- Stocks and shares
- Cryptocurrency
- Offshore accounts
- Investment losses
- Money in savings stamp schemes
- Cash in a PayPal account
- Money in a cashback site account
How to claim if your bank fails
In most cases, you won't need to do anything. FSCS protection kicks in automatically if a bank or building society fails.
The FSCS works with the failed bank to identify eligible customers and return their money.
For simple cases, you'll usually get your money back within seven working days. More complicated cases can take a bit longer, but you'll still be kept informed throughout the process.
If you do need to make a claim, follow these simple steps:
1. Visit fscs.org.uk – the FSCS will publish guidance specific to the failed firm.
2. Submit a claim online using the FSCS claims portal. You will need your account details and proof of identity.
3. The FSCS will asses your claim and contact you if further information is needed.
4. Compensation is paid directly to a bank account you specify.
Tip: You'll never be charged a fee to make an FSCS claim. If anyone contacts you offering to make an FSCS claim on you behalf for a fee, it's likely a scam.
How The AA keeps your savings secure
Looking for a secure place to grow your savings? We offer straightforward accounts with FSCS protection.
To be eligible for an AA savings account, you'll need to:
- Be a UK resident with a UK address
- Be aged 18 or over
- Have a UK mobile number
- Have UK tax residency only
- Have an open UK personal account that can be used as a nominated account
Our Easy Access Savings Account is designed for simplicity, allowing you to earn a return on your balance while keeping your funds accessible. Whether you're just starting to build your savings or moving a larger pot to stay within protected limits, we aim to make the setup process as easy as possible.
FAQs
Do I need to apply for FSCS protection?
No. FSCS protection is automatic for eligible deposits held with authorised UK firms. You don’t need to register or pay anything. If your bank fails, the FSCS will contact you directly in most cases.
Does FSCS protect my savings account?
If your savings account is held with a UK bank or building society that the FCA or PRA authorises, it’s likely to be covered up to £120,000. However, always check whether FSCS protects your provider. If you’re unsure, the financial firm should be able to confirm.
Does FSCS cover all banks in the UK?
Not all firms in the UK have FSCS protection. Only organisations that are fully authorised by the FCA or PRA are covered. Some e-money institutions, payment firms and overseas providers operating in the UK may not be FSCS-protected. Always check the FCA register before depositing significant sums with a provider.
Does the FSCS cover joint accounts?
Yes. Joint accounts are covered up to £120,000 per person, meaning a joint account held by two people may be protected up to £240,000. Each account holder’s share is assessed separately against their individual FSCS protection limit.
How long does it take to get my money back from FSCS?
For simple cases, the FSCS aims to return eligible deposits within seven working days of a firm failing. In more complex cases, it may take longer. The FSCS will keep you updated throughout the process.
Does FSCS protect investments as well as savings?
FSCS protects both savings and some investments, but not all. Cash in UK-authorised bank accounts is covered up to the protection limit, and certain investments are protected. However, investment losses are not covered, and many higher-risk or unregulated investments are not protected by FSCS at all. Visit fscs.org.uk for more information on what is covered.
*This article provides general information only. Limits are correct at the time of writing, but FSCS limits and rules can change. Always check the latest information provided on fscs.org.uk.