FSCS limit £120,000: what advisers should check for client cash

Clients with large cash balances often assume they are protected because their money is "in a bank". Many are, up to a point. But a client who spreads cash across several brands may find two of them share one banking licence, and a client who has just sold a house may be holding far more than the standard limit for a short time. Getting this right is part of giving sound cash advice.

This guide explains the FSCS limit of £120,000, which applies from 1 December 2025, how it works in practice, and what advisers should check before recommending where client cash goes.

The FSCS limit is now £120,000

The Financial Services Compensation Scheme protects eligible deposits "up to £120,000 per eligible person, per bank, building society or credit union". The FSCS says "On 1 December 2025 the deposit limit rose to £120,000", up from £85,000 (FSCS: banks and building societies).

Three practical consequences follow from that table.

• Old material needs updating. Any client letter, template, cash plan or website page that still says £85,000 is out of date.
• Earlier spreading may now be more than needed. A client who split cash across many institutions to stay under £85,000 per bank may be able to simplify, if that suits them.
• The limit is per institution, not per account. Several accounts at the same bank share one limit.

Shared banking licences: the most common trap

The FSCS limit applies per bank, building society or credit union, not per brand. Where several brands are part of the same banking group and share a banking licence, the FSCS treats them as one bank, and the £120,000 limit applies to the total across them (FSCS).

So a client who holds £100,000 with one brand and £100,000 with another may believe both sums are covered, when, if the two brands share a licence, protection is limited to £120,000 in total.

How to check

• For every product you are considering, identify the authorised institution behind the brand, not only the brand name.
• Group the client's existing and proposed holdings by institution.
• Add up the totals per institution and compare each with £120,000.
• Check again at each review, because the client's balances and holdings change.
• Record the check on file, with the date.

Use the FSCS's own information and the provider's disclosures to confirm which institution sits behind a brand. Do not rely on memory: licences and brand arrangements can change.

Temporary high balances

The FSCS also protects certain qualifying temporary high balances "up to £1.4 million for six months from when the amount was first deposited" (FSCS). This matters for clients who are briefly holding large sums, for example after a property sale or another significant event.

For advisers, the practical points are:

• Temporary high balance protection is time-limited (six months from first deposit), so it is not a long-term plan for a large balance.
• Check the FSCS's current rules on which events qualify and what evidence a client may need, before relying on it in advice.
• Plan where the money will go before the six months run out.
• Note the date the money arrived, so the time limit is visible on file.

Why FSCS checks belong in cash advice

Cash is a bigger part of many clients' wealth than advisers sometimes assume. 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" (Financial Lives 2024). For clients like these, FSCS protection is a central part of the recommendation, not a footnote.

It also fits the Consumer Duty. PRIN 2A.2.8R says "A firm must avoid causing foreseeable harm to retail customers" (PRIN 2A.2). Recommending a product that takes a client over the limit at an institution they already use, without saying so, is the kind of foreseeable harm a simple check can prevent.

Protection is one factor among several. Rate, access, notice periods, digital comfort and the client's wish for a branch all matter too. Our guide to cash savings advice for advisers covers the wider picture.

A checklist for advisers placing client cash

1. List all existing cash, by provider and by the institution behind each brand.
2. Confirm eligibility for FSCS protection for the client and the account type, using the FSCS's information.
3. Check the institution behind each proposed product, including any shared banking licence.
4. Total by institution and compare with £120,000, including what the client already holds there.
5. Flag temporary high balances and record the date and the plan for the six-month window.
6. Explain the position to the client in plain English, product by product.
7. Date the recommendation, so it is clear when rates and FSCS status were checked.
8. Repeat at review, because balances, products and arrangements change.

Updating your firm's materials

• Search templates, letters and the website for "£85,000" and update to £120,000 with the date it applied.
• Update any cash spreading calculators or spreadsheets.
• Brief advisers and paraplanners on the shared licence and temporary high balance points.
• Add an FSCS check to your file review checklist for cash advice.

Building FSCS checks into the recommendation

Reckoner builds these checks into the cash recommendation itself. It works across 239 FSCS-protected products in 15 categories, covering direct deposit-takers only. The deposit amount you enter rules out products that cannot be funded and flags FSCS limits as you type. Before the report is written, it checks rates, terms and FSCS status against the live market, then shows the FSCS position for each product in the ranked shortlist. The nine-page branded client report is adviser-signed and dated, and carries the date its market data is current to. The adviser still checks the client's wider holdings and makes the recommendation.

Frequently asked questions

What is the FSCS limit for savings?

Up to £120,000 per eligible person, per bank, building society or credit union. The limit rose from £85,000 to £120,000 on 1 December 2025.

Do brands that share a banking licence each get £120,000?

No. The FSCS treats brands sharing a banking licence as one bank, and the £120,000 limit applies to the total held across them.

What are FSCS temporary high balances?

The FSCS protects certain qualifying temporary high balances up to £1.4 million for six months from when the amount was first deposited. Check the FSCS's current rules on qualifying events before relying on this protection in advice.

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.