FSCS £85,000 Protection Explained — UK Savings Cover 2026/27

What FSCS is

The Financial Services Compensation Scheme is a statutory body funded by the UK financial industry. If a UK-authorised bank, building society or credit union fails, FSCS pays depositors back up to a fixed limit — currently £85,000 per person per banking group.

FSCS is automatic. You don't apply for cover, you don't pay a premium, and the protection can't be waived. As long as your bank is authorised by the Prudential Regulation Authority (PRA), you're covered by default.

How much is protected

The core rule for individual deposits:

• £85,000 per eligible depositor
• per authorised banking group (not per brand, not per account)
• across all deposit products at that group — current accounts, savings accounts, ISAs, fixed bonds, notice accounts

Joint accounts get double: £170,000 total cover, split as £85,000 to each holder.

The banking group rule — where most people slip up

A "banking group" is defined by its single PRA authorisation, not by the customer-facing brand. Many UK banks share an authorisation with a sister brand. Money split across two brands inside the same group still shares one £85,000 limit.

Some current examples:

The definitive list of licences is on the PRA's authorisations register. If in doubt, check before you deposit.

Joint accounts and multiple depositors

Joint accounts are treated as two allowances — one per named holder. A couple with a joint account gets £170,000 of cover on that balance.

Adding a child as a joint holder doesn't multiply cover unless the child is an eligible depositor (i.e. has their own beneficial interest in the money and would normally be a legal owner). Trust and executor accounts have their own rules.

Temporary High Balance protection

FSCS provides enhanced cover — up to £1,000,000 for up to six months — if the money arrived from certain "life events":

• Sale of a main residence
• Redundancy payment
• Insurance benefit or personal injury compensation
• Marriage or civil partnership settlement
• Inheritance
• Divorce settlement
• Pension lump sum
• Certain state benefits

The clock starts the day the money is credited. After six months you drop back to the standard £85,000 limit — so plan the split before the six months expires.

What is (and isn't) covered

How claims work if a bank fails

The process is designed to be automatic:

1. The PRA determines the bank is in default.
2. FSCS receives the failed firm's depositor records.
3. Compensation is paid by bank transfer or cheque within seven working days for most straightforward claims.
4. Complex claims (large sums, Temporary High Balance, trust and executor accounts) can take up to three months.
5. You do not need to sign up in advance — FSCS contacts eligible depositors directly.

Historically, FSCS has met or beaten the seven-day target in every major UK bank failure since the scheme's compensation timeline was tightened after 2008.

Real UK examples

Example 1 — the Halifax + Lloyds split. Amit thinks he's safe with £160,000 split between Halifax (£80,000) and Lloyds (£80,000). He isn't — both are inside Lloyds Banking Group, sharing one £85,000 limit. His £160,000 is exposed to £75,000 of counterparty risk. Fix: move £75,000 to a different banking group (e.g. Nationwide).

Example 2 — the joint account. Priya and Marcus keep £150,000 in a joint easy-access account. They're fine — joint accounts get £170,000 of cover (£85,000 per named holder). No action required.

Example 3 — Temporary High Balance. Sarah sells her flat for £280,000 in June. The money lands in her Nationwide current account. She has Temporary High Balance protection up to £1m for six months — so through December she's covered. In November she opens a Cash ISA and a fixed-rate bond at two other banking groups, spreading the balance so that by January she's back below £85,000 per group.

Common mistakes

• Assuming "different brand = different limit". Halifax + Lloyds, RBS + NatWest, HSBC + first direct — all pairs share one FSCS limit.
• Assuming NS&I is FSCS-protected. It isn't — but that's a good thing. NS&I is 100% backed by HM Treasury, which is stronger cover than FSCS. Just don't confuse the two.
• Waiting too long on a Temporary High Balance. Six months is not a lot. Spread the money as soon as reasonably possible after the qualifying event.
• Treating IFISA / P2P as protected. These are investments, not deposits. Your capital is at risk.
• Trusting an offshore or non-UK-authorised bank. Different national compensation schemes apply — and some countries have no scheme.

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Frequently asked questions

Do Halifax and Lloyds share one FSCS limit?

Yes. Halifax, Bank of Scotland and Lloyds all sit inside Lloyds Banking Group, sharing a single £85,000 FSCS allowance per depositor across the group. Splitting money between them does not increase protection.

Does FSCS cover joint accounts?

Joint accounts are treated as two separate £85,000 allowances — one per account holder — giving £170,000 of cover on the joint balance.

What is a Temporary High Balance under FSCS?

FSCS protects balances up to £1 million for six months if the money arrived from certain qualifying life events — for example, a house sale, redundancy payment, inheritance or insurance payout. After six months, only the standard £85,000 cover applies.

How quickly does FSCS pay out?

FSCS aims to pay most deposit claims within seven working days. Larger and more complex cases (including Temporary High Balance claims) can take up to three months.

Is my Cash ISA also covered by FSCS?

Yes — Cash ISAs at UK-authorised banks and building societies share the same £85,000 per-banking-group limit as other deposits. The ISA wrapper doesn't add or subtract from FSCS cover.

Summary

FSCS covers £85,000 per person per banking group — the group is defined by PRA authorisation, not by the brand on the sign. Joint accounts get £170,000. Temporary High Balance rules cover up to £1m for six months after a qualifying life event. NS&I sits outside FSCS but is HM Treasury-backed. Cryptoassets, IFISA, and offshore deposits sit outside cover entirely.

Next steps

1. Total your balance at each banking group (not brand). If any group holds more than £85,000, split the excess elsewhere.
2. Confirm your bank's group on the PRA authorisations register or by asking the bank.
3. If you have a joint account, remember your effective cover is £170,000 — you probably have more room than you think.
4. If you're expecting a lump sum (house sale, inheritance), plan the split before the six-month Temporary High Balance window closes.