FSCS and shared banking licences: how to check client cash

A client tells you their cash is safe because it is spread across two well-known savings brands, each holding less than the FSCS limit. It sounds sensible. But if those two brands operate under the same banking licence, the FSCS sees one bank, not two, and the client may have far less protection than they believe.

This guide goes deeper than the headline limit. It explains what a shared FSCS banking licence means, how to check which institution sits behind a brand, how to record the check, and why the point matters most for clients with large balances. For the wider rules, including the increase to £120,000, see our guide to the FSCS limit and cash advice.

What a shared FSCS banking licence means

Deposit protection attaches to the authorised institution, not to the name on the app or the savings leaflet. The FSCS protects "up to £120,000 per eligible person, per bank, building society or credit union" (FSCS). Where several brands share a banking licence, the FSCS treats them as one bank, and the £120,000 limit applies to the total across them.

Banking groups often run more than one brand. A group might keep a high street name, a digital savings brand and a specialist savings brand, all operating under one authorisation. Each looks like a separate bank to a client. For FSCS purposes, they can be one.

Why clients miss it

• Brands look independent. Different names, logos, websites and apps.
• Accounts were opened at different times. A client may have opened one account years ago and another recently, without connecting the two.
• Spreading was done by brand. A client who split money "across banks" may have split it across brands in one group.
• Arrangements change. Mergers, acquisitions and restructures can change which licence a brand uses.

How to check the licence behind a brand

The FSCS offers a "Bank & savings protection checker", which flags "Shared banking licence detected" where a brand shares a licence with others (FSCS protection checker). It is a sensible first step. The FSCS itself says the results are "for information only and we do not guarantee their accuracy", and suggests confirming with the bank and the FCA Financial Services Register.

A practical check for each brand a client holds or might hold:

1. Run the brand through the FSCS checker and note whether it reports a shared banking licence.
2. Read the provider's own disclosure. Providers normally say which institution they are part of and how FSCS protection applies.
3. Check the FCA Financial Services Register for the authorised firm behind the brand.
4. Write down the institution, not just the brand, with the date you checked and the source you used.
5. Resolve any conflict before advising. If two sources disagree, ask the provider and record the answer.

The date matters. A check made last year may no longer be right, so treat each check as true on the day it was made.

Grouping a client's cash by institution

Once you know the institution behind each brand, regroup the client's cash. A simple table on file does the job.

This is an illustration with made-up brands and balances. Viewed by brand, every balance is under £120,000. Viewed by institution, Institution 1 holds £150,000 in total, so £30,000 sits above the limit for that institution. The client may not realise that until somebody adds it up.

Include what the client already holds

The check is about the client's total with each institution, not just the new money. Ask about every account, including current accounts, old savings accounts and any joint arrangements, and confirm how the FSCS rules apply to each from the FSCS's own information. A recommendation that is fine on its own can push the total over the limit once existing balances are counted.

Why it matters most for large balances

For a client with a modest balance in one account, a shared licence rarely changes anything. The risk grows with the size of the balance and the number of accounts. Clients with large sums, such as those who have sold a business or a property, received an inheritance or are holding cash ahead of retirement, are the ones most likely to be spreading money across brands, and so the ones most exposed to a shared licence they do not know about.

Cash is a large part of many clients' wealth. The FCA's Financial Lives 2024 survey found "61% of adults with £10,000+ in investible assets held all or at least three-quarters of these assets in cash (58% in 2022)" (Financial Lives 2024). For these clients, the FSCS position is part of the recommendation, not a footnote.

It is also a Consumer Duty point. PRIN 2A.2.8R says "A firm must avoid causing foreseeable harm to retail customers" (PRIN 2A.2). Recommending a second brand from the same group, without telling the client that the two share one limit, is the kind of foreseeable harm a short check prevents.

Balances above the standard limit for a short time

Some clients hold large sums only briefly, after a qualifying life event. The FSCS can protect certain temporary high balances above the standard limit for a limited period, which is a separate question from shared licences. Check the FSCS's own rules before relying on that protection, and do not assume it applies.

Explaining it to the client

Clients usually understand the point quickly once it is put plainly. Language that works:

• "These two brands are part of the same bank, so for deposit protection they count as one."
• "The limit is £120,000 for you at that bank in total, across both brands."
• "If you would like all of this money within the limit, we would move some of it to a different bank."

Record that you explained it and how the client responded. Some clients will accept a balance above the limit for reasons of convenience, and that is their choice, but the file should show it was an informed one.

Building the check into every cash recommendation

• Add "institution behind each brand, checked and dated" to your cash advice file checklist.
• Recheck at every review, because balances and licences change.
• Show the FSCS position product by product in the client report.
• Keep the evidence: the date, the sources and what they said.

Reckoner helps with the mechanics. It covers 239 FSCS-protected products from direct deposit-takers, flags FSCS limits as the deposit amount is entered, and checks rates, terms and FSCS status against the live market before showing the FSCS position for each product in the shortlist. The adviser still needs to ask about the client's other holdings and confirm the overall position. See evidenced cash savings recommendations for how the report is built.

Frequently asked questions

Do two savings brands each get their own £120,000 FSCS limit?

Not if they share a banking licence. The FSCS treats brands sharing a banking licence as one bank, and the £120,000 limit applies to the total held across them.

How can I check whether brands share a banking licence?

Start with the FSCS's Bank & savings protection checker, which flags shared licences. The FSCS says its results are for information only, so confirm with the provider and the FCA Financial Services Register, and record the date and sources.

How often should shared licence checks be repeated?

At each review and whenever new money is placed. Licences and brand arrangements can change, and so can the client's balances.

See how Reckoner flags FSCS limits as you build a recommendation, or book a twenty-minute demo on Microsoft Teams with Adam Booth, run live on a demo firm with nothing to prepare.