Home / Business and Economy / UK Deposit Protection Limit Jumps 41% to £120,000 in December
UK Deposit Protection Limit Jumps 41% to £120,000 in December
18 Nov
Summary
- Deposit protection limit rises from £85,000 to £120,000 on December 1
- Temporary high balances protection increases from £1M to £1.4M
- New limits aim to maintain public confidence in safety of savings
On December 1, 2025, the amount of a customer's money protected if a UK bank or building society goes bust will rise to £120,000, a 41% increase from the current limit of £85,000. This new, higher-than-expected deposit protection limit is intended to provide more cover for savers in the event of a financial firm failure.
The original plan was to raise the limit to £110,000, but it has been increased further "in light of consultation feedback and to reflect the latest inflation data," which currently stands at nearly double the 2% target at 3.8%. The Prudential Regulation Authority, the Bank of England's regulatory arm, announced the new rules.
In addition to the higher deposit guarantee, the protection for "temporary high balances" - such as from the sale of a house or an inheritance - has also been increased, from £1 million to £1.4 million. This coverage lasts for up to six months and applies to other eligible life events like retirement or redundancy payouts.
