The Financial Services Compensation Scheme (FSCS) has announced an increase in the level of protection available to savers, with the deposit protection limit rising to £120,000 per person, per authorised institution.
This is a significant change and welcome news for individuals, business owners, and companies holding cash in UK banks — particularly in an economic climate where financial stability and risk management are more important than ever.
In this article, we explain:
What the FSCS is
What the new £120,000 limit means
Who is covered
How this affects business owners and company cash reserves
What you should do next
What Is the FSCS?
The Financial Services Compensation Scheme (FSCS) is the UK’s statutory compensation scheme that protects customers if a regulated financial firm fails.
If a bank, building society or credit union goes bust, the FSCS protects eligible deposits up to a certain limit.
Previously, this limit was £85,000 per person, per bank.
What Has Changed?
The FSCS deposit protection limit has now increased to:
✅ £120,000 per person, per authorised institution
This means:
Your money is protected up to £120,000 if your bank fails
The protection applies per person, not per account
Joint accounts are protected up to £240,000
Business accounts are also covered
This change gives greater peace of mind to individuals and businesses holding larger cash balances.
Why Has the Limit Increased?
The increase reflects:
Rising cash balances held by individuals and businesses
Inflation and higher interest rates
Lessons learned from recent bank failures globally
The need to strengthen consumer and business confidence
It also aligns UK protection more closely with international standards.
What Does This Mean for Business Owners?
For company directors and business owners, this change is particularly important.
✔ Business bank accounts are covered
✔ Client funds (where applicable) may be protected
✔ Cash reserves held for tax, VAT, or investment are safer
However, protection is still capped per banking licence, not per account.
This means:
If you hold £250,000 in one bank → only £120,000 is protected
If you split funds across different banks → each has its own £120,000 protection
Should You Be Reviewing Your Cash Position?
Yes — especially if you:
Hold large cash balances
Are building up funds for Corporation Tax or VAT
Have recently sold property or a business
Keep reserves for acquisitions or expansion
Operate multiple businesses under one group
This is an ideal time to review:
Where your money is held
Whether funds should be split across banks
Whether surplus cash could be working harder
Cashflow forecasting and risk exposure
How Bidwell Accountancy Can Help
At Bidwell Accountancy, we help clients:
✔ Review business and personal cash positions
✔ Assess FSCS protection exposure
✔ Structure accounts efficiently
✔ Improve cashflow planning
✔ Advise on tax-efficient use of surplus funds
✔ Support growing businesses with financial planning
We work with business owners, directors, landlords, and high-net-worth individuals across Milton Keynes and beyond.
Need Advice?
If you’re unsure whether your money is fully protected — or want to review your cash position in light of the new FSCS limit — we’re here to help.
📞 01908 380391
🌐 www.bidwellaccountancy.com
📍 Milton Keynes
📩 Or contact us to arrange a review with one of our advisers.
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