What Is the FSCS?
The Financial Services Compensation Scheme (FSCS) is a UK government-backed statutory fund that compensates consumers when authorised financial services firms fail. For bank deposits, it guarantees your money up to a defined limit — regardless of what happens to your bank.
The FSCS is funded by levies on regulated financial firms, but carries a government guarantee in extremis. In its history since 1988, no eligible UK depositor has ever lost a penny of protected funds. During the 2008 financial crisis, the FSCS paid out more than £26 billion — covering Bradford & Bingley, Icesave, and others — without a single delay or dispute on eligible claims.
It is not a marketing promise. It is a statutory obligation backed by UK law.
FSCS protects up to £85,000 per person per authorised institution. Joint accounts receive £170,000 total. This is a government-backed guarantee — in 35+ years, no protected depositor has lost money due to a UK bank failure. Checking whether your bank qualifies takes 60 seconds at register.fca.org.uk.
What FSCS Covers — and What It Doesn't
The FSCS covers several types of financial products, each with their own category and limit. For most savers, the deposit protection category is the most relevant.
| Account / Product | Covered? | Limit | Notes |
|---|---|---|---|
| Bank savings accounts | ✅ Yes | £85,000 | Per person, per authorised institution |
| Current accounts | ✅ Yes | £85,000 | Combined with savings at same bank |
| Cash ISAs | ✅ Yes | £85,000 | Included within the £85K total per bank |
| Fixed rate bonds | ✅ Yes | £85,000 | Counted within the £85K total |
| Joint accounts | ✅ Yes | £170,000 | £85K per person — treated separately |
| Temporary High Balance | ✅ Yes | Up to £1M | Up to 6 months for qualifying life events |
| NS&I Premium Bonds | ✅ HM Treasury | Unlimited | 100% government-backed — no cap |
| Stocks & Shares ISA | ✅ Yes (investments) | £85,000 | Separate FSCS investment category |
| E-money (Wise, Monevo) | ⚠️ Safeguarded only | — | Not FSCS — different protection model |
| Cryptocurrency | ❌ No | — | No protection of any kind |
| Foreign currency deposits | ✅ Yes | £85,000 | In sterling equivalent at time of failure |
⚠️ The £85,000 applies to the total of all your deposits at a single authorised institution — not per account. All your accounts at one bank count together toward one limit.
The Most Misunderstood Rule — Per Institution, Not Per Account
The single most important thing to understand about FSCS: the £85,000 limit applies to the total of all your deposits at a single authorised institution, not to each account separately.
Example: You hold a current account (£15,000) and an easy access savings account (£75,000) at the same bank. Total: £90,000. Only £85,000 is protected. The remaining £5,000 is at risk if the bank fails.
The solution: Spread balances above £85,000 across separately authorised institutions. But this requires knowing which banks share an authorisation:
⚠️ Banks Sharing One FSCS Limit
✅ Separately Authorised (Two Limits)
Authorisation structures change when banks merge, rebrand, or restructure. Do not rely on brand names alone — verify at register.fca.org.uk before assuming two brands give separate protection. Search both names and check if they share an FCA authorisation number.
Temporary High Balance — Up to £1 Million Protection
If you temporarily hold more than £85,000 in a bank account due to a specific life event, the FSCS provides extended temporary protection of up to £1 million for up to 6 months. Qualifying events include:
- Property sale proceeds — proceeds from selling your home before reinvesting
- Inheritance or bequest — money received from a deceased estate
- Insurance payout — life, home, or personal injury insurance proceeds
- Divorce or civil partnership settlement — court-ordered financial settlement
- Redundancy payment — statutory or enhanced redundancy pay
- Personal injury compensation — court award or settlement
You do not need to apply in advance — protection applies automatically. However, you should notify your bank that the balance relates to one of these events so it is correctly recorded. After 6 months, the standard £85,000 limit applies — ensure you distribute large balances across multiple institutions before the 6-month window closes.
FSCS vs Safeguarding — A Critical Difference
Not all UK financial firms are banks. E-money institutions — including Wise and (as of early 2025) Revolut — are not covered by FSCS. Instead, they must safeguard customer funds: holding them separately from the firm's own money in dedicated accounts at approved banks.
Safeguarding is meaningful protection — in an insolvency, your money should be recovered. But the process is slower, less certain, and relies on insolvency practitioners rather than an automatic government scheme. Monzo is the exception among neobanks: it holds a full UK banking licence and is FSCS protected. Revolut is expected to transition to full FSCS protection in 2025 as it completes its banking authorisation, but this was not complete as of January 2025.
How to Check If Your Bank Is FSCS Protected
What Happens If Your Bank Fails
The FSCS payout process for deposits is designed to be automatic and fast — you should not need to do anything in most cases.
Bank declared in default by FCA
The FCA or PRA officially declares the firm unable to repay deposits. FSCS payout process begins immediately.
Fast-track payment for essential amounts
If you have urgent needs (rent, mortgage, food), FSCS can fast-track an interim payment within 3 working days on request. Contact FSCS directly at fscs.org.uk.
Automatic full payout to eligible depositors
Most eligible deposits are returned automatically — you typically don't need to make a claim. Payment arrives in a new account at an acquiring bank or directly to you. No eligible depositor has ever waited longer than 7 working days.
Claim process for complex cases
If your claim wasn't resolved automatically — unusual account structures, foreign currency, Temporary High Balance — file a claim directly at fscs.org.uk. FSCS processes these within 20 working days.
Keep your savings across FSCS-protected institutions in amounts below £85,000 per institution. Know which of your banks share authorisations. Use NS&I Premium Bonds or government gilts for very large amounts that cannot easily be split. Check FSCS status for any new bank before depositing. These four steps are sufficient to ensure full protection for the vast majority of UK savers.