Finance glossary
FSCS — Financial Services Compensation Scheme
Also known as: Financial Services Compensation Scheme
In simple terms
The FSCS is the UK’s statutory safety net. If an authorised financial firm fails and cannot pay what it owes you, the FSCS can compensate you — protecting savings up to £85,000 per person, per firm.
On this page
What is the FSCS?
The Financial Services Compensation Scheme (FSCS) is the UK’s compensation scheme of last resort for customers of authorised financial firms. It steps in when a firm has stopped trading or cannot meet claims against it, and the service is free to consumers.
It covers a wide range of products — deposits with banks, building societies and credit unions, plus many investments, insurance policies, mortgage advice and pensions — provided the firm was FCA-authorised.
How the FSCS works
For deposits, the FSCS protects up to £85,000 per eligible person, per authorised firm. If you hold more than that with a single firm, the amount above £85,000 may not be protected — and note that some banking brands share one authorisation, so they share the limit. There is separate cover of up to £1 million for six months for “temporary high balances”, such as money from a house sale.
Investment and most other claims are also protected up to £85,000 per person, per firm. Crucially, the FSCS protects you against a firm failing — it does not cover investments that simply fall in value or decisions that turn out badly when the firm is still trading.
How could this affect me?
The FSCS means your money is protected if a bank or other authorised firm goes bust — one of the main reasons to keep savings with FCA-authorised firms and to check how banking brands are grouped under a single authorisation.
If you hold large balances, spreading money across separate authorised firms keeps more of it within the £85,000 limits. The scheme does not compensate you for ordinary investment losses, so it is not a guarantee your investments will not fall.
Example
You have £100,000 saved with one bank that then fails:
| Total held with the failed bank | £100,000 |
|---|---|
| FSCS deposit protection limit | £85,000 per person, per firm |
| Compensation you could receive | £85,000 |
| Amount at risk (above the limit) | £15,000 |
Figures are illustrative. Spreading savings across separate authorised firms can keep more of your money within the limits; temporary high balances may be protected up to £1m for six months.
Things to watch out for
- The £85,000 limit is per person, per authorised firm — some banking brands share one authorisation and therefore one limit.
- The FSCS protects against a firm failing, not against investments falling in value or bad decisions.
- Only FCA-authorised firms are covered — unregulated products and firms usually are not.
- Large balances above £85,000 with a single firm are at risk unless they qualify as temporary high balances.
Know your rights
- Eligible deposits are protected up to £85,000 per person, per authorised firm.
- Temporary high balances (for example, from a property sale) can be protected up to £1 million for six months.
- Investments and most other eligible claims are protected up to £85,000 per person, per firm.
- Compensation is free to claim, and you can claim directly through the FSCS.
General information, not personal advice
Consumer Credit is an independent information service. We do not provide regulated financial advice or sell financial products. For advice on your own situation, speak to an appropriately authorised firm or a free service such as MoneyHelper. About Consumer Credit.
Sources
We checked this page against these official and authoritative sources.
- FSCS, What we cover (opens in a new tab). Accessed 22 Aug 2026.
- FSCS, Deposit protection and temporary high balances (opens in a new tab). Accessed 22 Aug 2026.