Over the FSCS Limit: How Deposit Protection Works Across Multiple Banks

The Financial Services Compensation Scheme (FSCS) is the UK's statutory deposit guarantee scheme. It protects eligible deposits held with UK-authorised banks, building societies, and credit unions if the firm fails. The scheme was established under the Financial Services and Markets Act 2000 and operates automatically — depositors do not need to register or apply for coverage.

A central feature of FSCS protection is that it applies per person, per authorised firm (that is, per banking licence), not per account or per brand. This distinction is critical for anyone holding deposits across multiple accounts or banking brands, because several well-known high street brands share a single banking licence. Understanding how this per-licence rule works is fundamental to understanding the scope of FSCS protection.

This article explains how the FSCS deposit protection limit operates, how the per-licence rule affects deposits held across different banks and brands, and what the key exceptions and edge cases are. It does not provide financial advice or recommend any particular course of action.

The FSCS protects eligible deposits up to £120,000 per person, per authorised firm (per banking licence). This limit took effect on 1 December 2025 for firms that fail on or after that date, replacing the previous limit of £85,000 which had been in place since January 2017.

The protection limit is not calculated per account or per brand — it is calculated per banking licence. If a depositor holds accounts with two brands that share the same banking licence, all eligible deposits across those brands are added together for the purposes of FSCS protection. For joint accounts with two holders, each named holder is entitled to £120,000 protection, giving a combined limit of £240,000.

The authoritative way to confirm whether two brands share a banking licence is to check the Firm Reference Number (FRN) on the FCA Financial Services Register.

The FSCS exists to compensate depositors if a UK-authorised bank, building society, or credit union fails. Protection is automatic and does not require depositors to take any action in advance.

When a firm fails, the FSCS obtains depositor information from the insolvency practitioner appointed to deal with the failed firm. The FSCS then publishes information about what has happened and pays compensation. The FSCS aims to pay compensation within 7 working days for standard deposit claims. Depositors typically do not need to submit a claim — payments are made automatically by electronic transfer or cheque.

The scheme is overseen by both the Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA). The PRA is responsible for implementing depositor protection rules, with the statutory protection limit set by HM Treasury following PRA review. Following EU withdrawal, the UK has discretion to set its own limit rather than being tied to the EU €100,000 requirement. The PRA is required to review the deposit protection limit at least every five years under the Deposit Guarantee Scheme Regulations 2015.

The Per-Licence Rule

The single most important concept in understanding FSCS deposit protection is the per-licence rule. Protection applies per person, per authorised firm — meaning per banking licence, not per account and not per brand.

Many large banking groups operate multiple consumer brands under a single banking licence. When this is the case, all eligible deposits held across all of those brands are aggregated and treated as a single total for FSCS purposes. In practical terms, if two brands share a licence, holding £120,000 with each brand does not mean £240,000 of protection — it means a combined £120,000 of protection for that one licence.

In most cases, the authoritative way to verify whether two brands share a banking licence is to check the Firm Reference Number (FRN) on the FCA Financial Services Register. If two brands share the same FRN, they share a licence and deposits are aggregated.

Separate Licences Within the Same Banking Group

Some banking groups do hold separate licences for different brands within the group. This means that, despite being part of the same parent company, each separately licensed entity provides its own £120,000 of FSCS protection.

According to published consumer sources, examples of separate licensing arrangements include Lloyds Bank (FRN 119278) holding a separate licence from Bank of Scotland and Halifax (FRN 169628), despite all being within Lloyds Banking Group. Similarly, NatWest (FRN 121878) holds a separate licence from Royal Bank of Scotland (FRN 114724) and from Coutts (FRN 122287). M&S Bank (FRN 151427) holds a separate licence from HSBC and first direct (FRN 765112). These arrangements may vary depending on corporate restructuring; licensing structures can change, and the FCA Register is definitive.

What Deposits Are Covered

The £120,000 limit applies to eligible deposits held in current accounts, savings accounts, cash ISAs, and savings bonds at the same authorised firm. All eligible deposits at the same firm are aggregated to determine coverage.

The following figures and timelines are drawn from primary regulatory sources unless otherwise noted.

Standard deposit protection limit

£120,000 per eligible person, per authorised firm. Effective for firms failing on or after 1 December 2025. The previous limit of £85,000 applies to firms that failed before that date.

Joint accounts

For a joint account with two holders, each named holder is entitled to £120,000 of protection, giving a combined limit of £240,000. However, if an individual holds both a joint account and individual accounts with the same banking group, the £120,000 limit applies across all accounts combined for that individual.

Temporary high balance (THB) protection

£1.4 million for qualifying life events, increased from £1 million on 1 December 2025. Protection lasts for 6 months from when the amount was first deposited or became legally transferable. Moving funds between accounts — including to another firm — does not restart the 6-month period.

Uncapped THB protection

Deposits arising from personal injury, disability, or incapacity awards receive uncapped temporary high balance protection for 6 months from when funds are first received or become legally transferable. This is the only category with uncapped THB protection.

Qualifying life events for THB protection

These include transactions relating to the purchase or sale of a main residence; events such as death, marriage or civil partnership, divorce, retirement, dismissal, redundancy, or invalidity; and insurance benefits or compensation for criminal injuries or wrongful conviction.

FSCS compensation timeline

The FSCS aims to pay compensation within 7 working days for standard deposit claims. According to published guidance, more complex cases — such as those involving temporary high balances — may take up to 15 working days.

Firm disclosure updates

Firms had until 31 May 2026 to update disclosure materials to reflect the new £120,000 limit, under a transitional period granted by the PRA. Firms were required to update their Single Customer View (SCV) systems from 1 December 2025.

"I have accounts with three different brands, so I have three times the protection."

This is only true if each brand holds a separate banking licence. Several major high street brands share licences with other brands in the same group. The brand name on the account does not determine the scope of protection — the banking licence does. The FCA Financial Services Register is the definitive way to check.

"The limit is per account."

It is not. The FSCS limit applies per person, per authorised firm. All eligible deposits held by the same person at the same authorised firm — across however many accounts or brands that firm operates — are added together.

"Joint accounts give us double protection on everything."

Joint accounts with two holders do receive up to £240,000 of combined protection. However, if one of the account holders also has individual accounts at the same firm, their share of the joint account and their individual deposits are aggregated against the same £120,000 individual limit.

"The new £120,000 limit applies to everything."

The £120,000 limit applies to firms that fail on or after 1 December 2025. For firms that failed before that date, the previous £85,000 limit still applies. The limit is not retrospective.

"NS&I is FSCS protected."

National Savings and Investments (NS&I) is not covered by the FSCS. However, NS&I is an executive agency of the Chancellor of the Exchequer, and all NS&I savings — including Premium Bonds, Income Bonds, Direct Saver, Guaranteed Growth Bonds, Guaranteed Income Bonds, and Junior ISA — are 100% guaranteed by HM Treasury with no upper limit. The protection mechanism is different, but the government backing is complete.

"I sold my buy-to-let and the proceeds are covered by temporary high balance protection."

Temporary high balance protection for real estate transactions applies only to the depositor's main or only residence. Proceeds from second homes or buy-to-let properties do not qualify.

Business Partnership Accounts

Deposits in accounts to which two or more persons are entitled as members of a business partnership, association, or grouping without legal personality (unlike LLPs or limited companies, which are treated as separate depositors) are treated differently from personal joint accounts. These deposits are aggregated and treated as if made by a single depositor. The £120,000 limit applies to the total held in the partnership name, not per partner.

Excluded Depositors and Deposit Types

Certain depositors and deposit types are excluded from FSCS protection entirely. Exclusions include deposits where the holder or beneficial owner has not been identified in accordance with money laundering requirements; deposits arising from transactions connected to a criminal money laundering conviction; deposits made by credit institutions, financial institutions, investment firms, insurance or reinsurance undertakings, collective investment undertakings, pension or retirement funds, and public authorities other than small local authorities; and deposits held by a credit union to which the credit union itself is entitled.

E-Money and Payment Institutions

E-money institutions and payment institutions are not covered by FSCS deposit protection. However, where these firms hold safeguarded customer funds at UK-authorised credit institutions, those underlying deposits may be protected if the credit institution itself fails. In that scenario, each end customer is separately protected up to £120,000, following rule changes that took effect in March 2023.

Products Not Covered by FSCS

FSCS deposit protection does not cover cryptocurrencies, e-money balances, peer-to-peer lending, Christmas savings clubs, or losses arising from investment performance. Some cryptocurrency platforms may be registered with the FCA for anti-money laundering purposes, but this registration does not provide FSCS deposit protection.

Savings Marketplaces and Cash Platforms

Deposits held through savings marketplaces or cash platforms (sometimes called deposit aggregators) may be FSCS protected depending on where the funds are ultimately held. If the aggregator has deposited money with a UK-authorised bank, the savings are likely FSCS protected. Each partner bank within the marketplace provides separate £120,000 protection, provided the funds are held at partner banks in a manner attributable to the individual customer. However, the FSCS protection checker may not return results for some savings marketplaces, so verification may require checking where funds are actually deposited.

Deposits Held by UK Firms' EEA Branches

Following EU withdrawal, deposits held by UK firms' branches in the European Economic Area are not protected by the FSCS. Such deposits may instead be protected by the relevant EEA state's own deposit guarantee scheme. Eligible deposits held in Gibraltarian branches of UK firms are still protected by the FSCS.

FSCS Cannot Pre-Confirm THB Protection

The FSCS cannot confirm in advance whether a particular temporary high balance will be protected. This is because the FSCS needs to review all available evidence to check there is a sufficient connection between the qualifying life event and the sums in the account. This assessment can only take place after a firm has actually failed.

The per-licence rule means that the number of separate accounts a depositor holds is not, on its own, a meaningful measure of FSCS coverage. What matters is how many separate banking licences those accounts sit under. Two accounts at different branches of the same bank provide no more FSCS protection than a single account. Conversely, accounts at two separately licensed firms — even if those firms are part of the same corporate group — each attract their own £120,000 of protection.

For joint accounts, the position is more nuanced. While a joint account with two holders attracts up to £240,000 of combined protection, each individual's share is still measured against their personal £120,000 limit across all accounts at that firm. The joint account does not create a separate pool of protection independent of each holder's other deposits at the same institution.

Temporary high balance protection provides a significant but time-limited safeguard for depositors who receive large sums through qualifying life events. The 6-month window runs from the date of deposit or the date funds become legally transferable, and this clock does not reset if funds are moved between accounts — including to another firm. The one exception to the £1.4 million THB cap is deposits from personal injury, disability, or incapacity awards, which receive uncapped protection for the same 6-month period.

NS&I occupies a distinct position in the landscape. While it is not FSCS protected, its 100% HM Treasury guarantee means deposits are fully backed by the government regardless of amount. The protection mechanism differs, but the underlying government commitment is without limit.

The FCA Financial Services Register remains the single authoritative source for verifying which brands share a banking licence. Brand names, parent company names, and branch locations are not reliable indicators. Only the Firm Reference Number confirms the licensing position.

What is the current FSCS deposit protection limit?

The limit is £120,000 per eligible person, per authorised firm (per banking licence). This took effect on 1 December 2025, replacing the previous limit of £85,000 that had been in place since January 2017.

How does FSCS protection work for joint accounts?

Each named holder on a joint account is entitled to £120,000 of protection, giving a combined limit of £240,000 for a two-person joint account. However, if an individual also holds separate accounts at the same firm, their share of the joint account and their individual deposits are aggregated against their personal £120,000 limit.

How can I check whether two banks share a licence?

The authoritative method is to check the Firm Reference Number (FRN) on the FCA Financial Services Register. If two brands display the same FRN, they share a licence and deposits across both are aggregated for FSCS purposes.

Are NS&I savings FSCS protected?

No. NS&I is not covered by the FSCS. However, NS&I is backed by HM Treasury with a 100% government guarantee and no upper limit. This applies to all NS&I products including Premium Bonds.

What is temporary high balance protection?

If a depositor receives a large sum from a qualifying life event — such as the sale of a main residence, a divorce settlement, or a redundancy payment — deposits up to £1.4 million may be protected for 6 months from when the funds were deposited or became legally transferable. Deposits from personal injury, disability, or incapacity awards receive uncapped protection for the same 6-month period.

Does THB protection cover proceeds from selling a second home or buy-to-let property?

No. Temporary high balance protection for real estate transactions applies only to the depositor's main or only residence.

How quickly does FSCS pay compensation?

The FSCS aims to pay compensation within 7 working days of a firm failing, for standard deposit claims. According to published guidance, more complex cases may take up to 15 working days.

Are e-money accounts and digital wallets FSCS protected?

E-money institutions and payment institutions are not covered by FSCS deposit protection. However, if these firms hold safeguarded customer funds at a UK-authorised bank, those underlying deposits may be protected if the bank itself fails.

Are cryptocurrency holdings FSCS protected?

No. FSCS deposit protection does not cover cryptocurrencies. FCA registration for anti-money laundering purposes does not provide FSCS protection.

What happens to deposits held through savings platforms or cash marketplaces?

Deposits held through savings marketplaces may be FSCS protected depending on where the funds are ultimately deposited. If the marketplace places funds with a UK-authorised bank, the deposits are likely FSCS protected, and each partner bank provides separate £120,000 protection, provided funds are held in a manner attributable to the individual customer.

Are business partnership accounts treated the same as personal joint accounts?

No. Deposits held by business partnerships, associations, or groupings without legal personality are aggregated and treated as if made by a single depositor. The £120,000 limit applies to the total, not per partner.

• FSCS deposit protection is £120,000 per person, per authorised firm (per banking licence) for firms failing on or after 1 December 2025.
• Protection is calculated per banking licence, not per account or per brand. Multiple brands sharing a licence are aggregated.
• Joint accounts with two holders attract up to £240,000 combined protection, but each individual's share counts toward their personal £120,000 limit.
• Temporary high balance protection covers up to £1.4 million for qualifying life events, for 6 months from deposit.
• NS&I is not FSCS protected but carries a 100% HM Treasury guarantee with no upper limit.
• E-money, cryptocurrencies, peer-to-peer lending, and Christmas savings clubs are not FSCS protected.
• The FCA Financial Services Register is the authoritative way to verify whether two brands share a banking licence.

Related: How to Find Lost Savings Accounts | Savings Account Closed Without Notice.