What is the maximum amount of money protected in your bank account by the Financial Services Compensation Scheme (FSCS)?
The maximum amount of money protected in your bank account by the Financial Services Compensation Scheme (FSCS) is £85,000 per person, per authorised institution, or £170,000 for joint accounts.
Understanding FSCS Protection Limits
The Financial Services Compensation Scheme (FSCS) is the UK's deposit guarantee scheme, designed to protect customers' money if an authorised financial firm, such as a bank or building society, fails. This protection ensures that your savings are safeguarded up to a specific limit, even if your financial institution goes out of business.
How FSCS Protection Works
The protection limit applies per individual, per authorised financial institution. This means that if you hold accounts with different banks that are separate legal entities, your money in each distinct institution is protected up to the specified limit.
Individual Accounts
For a single person, the FSCS protects up to £85,000. This limit covers all eligible deposits held with one authorised bank or building society, including money in current accounts, savings accounts, and ISAs.
- Example: If you have £60,000 in a savings account and £30,000 in a current account with the same bank (totaling £90,000), only £85,000 would be protected by the FSCS if that bank were to fail. The remaining £5,000 would not be covered.
Joint Accounts
For joint accounts, the protection limit is effectively doubled to £170,000. This is because each account holder is individually covered up to £85,000 within the joint account.
- Example: A couple holding £150,000 in a joint savings account would have their full amount protected, as it falls within the £170,000 limit for joint deposits.
Temporary High Balances
In certain specific circumstances, such as receiving proceeds from a house sale, an inheritance, or a one-off insurance payout, a temporary high balance of up to £1,000,000 may be protected for a period of up to six months. This special measure is designed to provide extended coverage during significant life events.
Summary of FSCS Protection Limits
To clarify the general protection limits, refer to the table below:
| Account Type | FSCS Protection Limit |
|---|---|
| Individual Accounts | £85,000 per institution |
| Joint Accounts | £170,000 per institution |
| Temporary High Balances | Up to £1,000,000 (for up to 6 months in specific circumstances) |
Maximizing Your FSCS Protection
To ensure more of your money is protected, consider these practical strategies:
- Diversify Across Institutions: If your total savings exceed £85,000 (or £170,000 for joint funds), consider spreading your money across different banks or building societies that are separate legal entities. This ensures each pot of money benefits from the individual FSCS limit.
- Check Groupings: Be aware that some banks operate under different brand names but belong to the same banking group and share a single FSCS licence. Consolidating funds across brands within the same group will not increase your protection.
- Utilize Joint Accounts: For couples, joint accounts are an effective way to double your protection limit within a single financial institution.
Checking Your Bank's Coverage
It is crucial to verify that your bank or building society is covered by the FSCS. You can easily do this by checking the Financial Services Register. This official online resource allows you to confirm if a financial firm is authorised and which services they are permitted to provide, including their FSCS protection status.
