FSCS Protection Rises to £120,000 — New Confidence for Clients and Advisers

Effective 1 December 2025, the Financial Services Compensation Scheme (FSCS) deposit protection limit has increased from £85,000 to £120,000 — the first uplift since 2017.  This significant change enhances depositor confidence and ensures protection keeps pace with inflation and broader financial market developments.

With this new limit, eligible structured deposits held with authorised UK banks, building societies, and credit unions are now covered up to £120,000 per person, per institution in the event of failure. 

For many clients, this offers a crucial step forward in safeguarding their savings and investments.

Why This Matters Now

For advisers, the rise represents an important opportunity to revisit client discussions and portfolio strategies.  Clients can now hold larger structured deposit positions with greater confidence, knowing more of their capital is protected under the FSCS.

This added protection supports stronger diversification and stability, aligning well with clients who hold significant cash balances or are seeking safer places to invest amid ongoing market volatility.

A Strategic Advantage for Advisers

The higher protection threshold enhances advisers’ ability to tailor risk-managed solutions.  Structured deposits now stand out as an effective “middle ground”, offering both capital security and potential market-linked returns.

In a climate where many investors are looking to lock in profits or step back from higher-risk assets, this development gives advisers a timely reason to highlight structured deposits as a versatile, low-risk addition to client portfolios.

Adviser Action Points

Now is the ideal moment for advisers to update client materials to reflect the new FSCS limit, review suitability and cash strategies, especially for clients approaching previous thresholds and revisit structured deposit recommendations as part of a balanced investment proposition.  Taking these steps will help strengthen client confidence and highlight the value of professional advice in navigating evolving market conditions.

In Summary

The new £120,000 FSCS limit is great news for both advisers and investors.  It strengthens client trust, broadens investment flexibility, and enhances the strategic role structured deposits can play in well-diversified portfolios.

Terry Dixon

Sales Director