From the start of December 2025, the Financial Services Compensation Scheme (FSCS) protection limit has increased from £85,000 to £120,000 per eligible depositor, per authorised bank, building society or credit union.
This change, announced by the Prudential Regulation Authority (PRA), strengthens the safety net available to both individuals and businesses in the event that their financial provider fails.
Why the Increase Matters
For companies – particularly those holding significant cash reserves within trading or holding structures – this enhancement provides valuable additional security. The uplift in protection offers reassurance but also serves as a timely reminder to review how cash is allocated across different banking groups. Ensuring deposits are spread appropriately can help you take full advantage of the new limit and minimise exposure.
Reviewing Your Banking Structure
With the higher limit now in place, businesses may benefit from reassessing whether their existing banking arrangements remain suitable. This is especially relevant if you:
- Maintain large operational or strategic cash balances
- Expect substantial inflows due to future investment or fundraising
- Are seeking greater diversification or risk reduction across banking providers
Carefully structuring deposits across multiple authorised institutions can help maximise FSCS protection and strengthen financial resilience.
How Johnston Wood Roach Can Help
If your business holds significant cash reserves or is planning future investment, the Johnston Wood Roach team can support you in reviewing your current banking framework. Our team can help you evaluate whether your structure remains appropriate under the new FSCS limit and identify opportunities to optimise the distribution of your funds.
