(qlmbusinessnews.com . Tue 18th Nov, 2025) London, UK —
Breaking News: Major Uplift in Financial Safety for UK Bank Customers to £120,000
UK bank customers are set to benefit from an enhanced level of financial security, as the Prudential Regulation Authority (PRA) has announced a significant uplift in the protection limit for deposits. Should a bank or building society face collapse, individuals can now recover up to £120,000 of their funds, an increase from the previous cap of £85,000.
This amendment, set to be implemented in December, is the most substantial escalation in deposit protection since the limit was last revised in 2017. The PRA, responsible for the oversight of banks in the UK, has made this decision to bolster consumer confidence in the banking system.
Martyn Beauchamp, CEO of the Financial Services Compensation Scheme (FSCS), commented on the change, stating, “This enhancement empowers our customers with the assurance that their money is safeguarded up to a more generous limit of £120,000.”
Originally, the PRA proposed an increase to £110,000. However, after considering recent inflation trends and community feedback, the Bank of England endorsed a more robust adjustment. The FSCS protection is extended to each individual per authorised institution. It's crucial to note that some banking entities operate multiple brands under a singular licence; hence, the protection cap is aggregate across these brands.
Banking customers need not undertake any immediate actions to benefit from this revised scheme, as the updated limit will be automatically applied to eligible deposits.
Sam Woods, Deputy Governor for Prudential Regulation at the Bank of England and CEO of the PRA, highlighted the importance of this initiative, saying, “Through this adjustment, we aim to reinforce public trust in the safeguarding of their funds, enhancing the integrity of our financial ecosystem.”
Consumer advocacy group Which? has praised the move, with Rocio Concha, Director of Policy and Advocacy, acknowledging it as a “sensible decision” that reinforces trust in financial services without impeding economic growth objectives.
Additionally, Eric Leenders of UK Finance, representing the banking sector, welcomed the update, recognising it as a necessary step in reflecting inflationary pressures and facilitating the implementation of these protective measures.
Furthermore, the protection for temporary high balances, designed to safeguard significant sums from events like property transactions or insurance settlements, will see an elevation from £1 million to £1.4 million, valid for six months.
Financial expert Rachel Springall from Moneyfactscompare.co.uk advises consumers to remain informed about their banking choices, noting the introduction of a newly designed badge to help identify FSCS-protected institutions more easily.
Funded through a levy on authorised financial firms, the FSCS plays a pivotal role in maintaining stability and confidence within the UK's financial landscape.
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