Finance
Bank of England boosts deposit guarantee for savers to 120,000 pounds
Published by Global Banking and Finance Review
Posted on November 18, 2025
2 min readLast updated: January 21, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on November 18, 2025
2 min readLast updated: January 21, 2026
The Bank of England has raised the deposit guarantee to £120,000, enhancing savers' protection and public confidence amid persistent inflation.
By Phoebe Seers
LONDON (Reuters) -British savers will have up to 120,000 pounds ($158,000) of their money protected in the event of a bank failure, the Bank of England said on Tuesday after increasing the deposit guarantee limit by 40%.
The current Financial Services Compensation Scheme (FSCS) cap of 85,000 pounds was set in 2017. The Bank of England's Prudential Regulation Authority (PRA), which had previously proposed an increase to 110,000 pounds, said it opted for a higher threshold to reflect persistently high inflation.
“This change will help maintain the public’s confidence in the safety of their money,” said PRA Chief Executive Sam Woods.
The new cap exceeds the European Union’s harmonised 100,000 euro ($115,860) limit but remains below the limit in the United States, where coverage is at least $250,000 per depositor.
The FSCS is funded by the industry and compensates customers when a bank or building society collapses. The cap for certain temporary high balances – such as proceeds from a home sale – will rise to 1.4 million pounds from 1 million pounds, the PRA also announced on Tuesday.
($1 = 0.7590 pounds)
($1 = 0.8631 euros)
(Reporting by Phoebe SeersEditing by Tommy Reggiori Wilkes and David Goodman)
A deposit guarantee is a financial protection mechanism that ensures depositors will receive compensation for their deposits if their bank fails, up to a specified limit.
Inflation is the rate at which the general level of prices for goods and services rises, eroding purchasing power and affecting economic stability.
The PRA is a regulatory body in the UK responsible for the prudential regulation and supervision of banks, insurers, and investment firms to ensure financial stability.
A temporary high balance refers to a situation where a depositor has a large sum of money in their account for a short period, such as from a property sale, which may be covered by higher compensation limits.
Explore more articles in the Finance category