What the FSCS protects
The Financial Services Compensation Scheme (FSCS) is the UK's statutory compensation fund, protecting customers if an authorised financial firm — a bank, building society, insurer, or investment firm — fails and can't meet its obligations. It's funded by a levy on the financial services industry, not the government directly, though it operates under statutory authority.
Current protection limits
| Type of product | Protection limit |
|---|---|
| Bank/building society/credit union deposits | £120,000 per eligible person, per institution |
| Investments | £85,000 per eligible person, per firm |
| Insurance (most policies) | 90% of the claim, uncapped |
| Compulsory and certain long-term insurance | 100% of the claim, uncapped |
The "per institution" trap
Protection applies per banking licence, not per brand — several well-known banking brands actually share the same underlying licence, meaning money spread across what looks like different banks could actually be with the same protected entity, exceeding the limit without you realising. It's worth checking which banking licence a brand actually operates under if you're deliberately spreading savings to stay within protection limits.
Who's eligible
FSCS protection covers individuals and, in more limited circumstances, some small businesses and charities — the exact eligibility can vary by product type, so it's worth checking current rules if you're protecting funds held by a business or trust rather than a personal account.
What isn't protected
Some products fall outside FSCS protection entirely — certain high-risk or unregulated investments, and money held with firms that aren't UK-authorised at all. Always check a provider is FCA-authorised (via the FCA register) before assuming FSCS protection applies.
Key takeaways
- The FSCS protects deposits up to £120,000 and investments up to £85,000, per person, per institution.
- Several banking brands can share the same licence — check before assuming you're doubling protection.
- Insurance protection is typically 90%, or 100% for certain compulsory and long-term policies.
- Always confirm a firm is FCA-authorised before assuming FSCS protection applies.