Government Deposit Protection Scheme limit reduced to £75,000

07 December 2015

Investors are being reminded that the Financial Services Compensation Scheme (FSCS) limit is changing from 1 January 2016.

The FSCS is a body which protects the money you have deposited with banks, building societies or credit unions, in the event that they get into difficulties and fall into default.  At present the limit for compensation for lost deposits stands at £85,000 but from 1 January it will fall to £75,000.  Any money which you have deposited in any number of accounts (including current accounts) which totals more than this amount will not be covered.

If you have more than £75,000 in one financial institution, it may be wise to consider moving some of your funds to a different authorised deposit taker to ensure that, if the worst happens, you do not lose out.  The scheme protects individuals and small businesses and the limit covers each investor, so that in the case of a joint account, each depositor is covered for the full £75,000.

In some cases, where the FSCS deems there is a “temporary high balance” on an account due to extraordinary circumstances, more compensation may be available, but only for a period of 6 months following the date such a deposit was made.   This might apply in the case of an interim deposit, for example as part of an inheritance, the sale of a house or an insurance claim.

The changes are unlikely to affect many of us as FSCS say that 95% of investors in UK have £50,000 or less with any one bank or building society.

For more information visit the FSCS website

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

Image courtesy of Vichaya Kiatying-Angsulee at

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