FSCS temporary high balances: what qualifies and what to do
FSCS temporary high balance protection can cover up to £1.4 million for six months after certain life events. What qualifies, when the clock starts, how claims work, and a practical plan for advisers.
On this page
- What FSCS temporary high balance protection is
- Which life events qualify
- When the six months start, and why moving money does not reset them
- What advisers should do
- 1. Identify the event and confirm it qualifies
- 2. Record the key dates
- 3. Help the client keep the evidence
- 4. Agree a plan before the window ends
- 5. Check every institution, including shared licences
- 6. Explain it plainly
- Common misunderstandings to correct
- Recording it on file
- Frequently asked questions
- How much do FSCS temporary high balances cover?
- When does the six-month period start?
- Is temporary high balance protection paid automatically?
A client sells their home and the proceeds land in their bank account the same afternoon. Suddenly they hold several times the standard deposit protection limit with one bank. They ask whether the money is safe while they decide what to do next. The answer is that it may be, for a while, under the FSCS rules on temporary high balances, but only if the event qualifies, only for a limited time, and, if the bank fails, only once the client has claimed and provided the right evidence.
This guide sets out what the FSCS says about temporary high balances, what qualifies, how long protection lasts, and what an adviser can do to help a client use that window well. It sticks to the FSCS's published position. Always check the FSCS's current rules before relying on them for a particular client.
What FSCS temporary high balance protection is
The standard limit is £120,000 per eligible person, per bank, building society or credit union, and it applies from 1 December 2025 (FSCS). Temporary high balance protection sits on top of that for certain life events. According to the FSCS, it covers up to £1.4 million for six months per qualifying event, and is unlimited where the money relates to personal injury, disability or incapacity (FSCS: temporary high balances).
| Point | Standard protection | Temporary high balance protection |
|---|---|---|
| Amount | Up to £120,000 per eligible person, per institution | Up to £1.4 million per qualifying event (unlimited for personal injury, disability or incapacity) |
| How long | Ongoing | Six months from when the money becomes legally transferable to the client or is first credited |
| How it is paid | Automatically, usually within seven working days | If the provider fails, the client must request an application form and provide evidence; the FSCS aims to pay within three months if the claim is eligible and the evidence is provided |
That last row is the one clients most often miss. The FSCS says that for standard protection a saver does not need to do anything if their provider fails, as it will compensate them automatically (FSCS). Temporary high balances work differently. The FSCS says these claims take longer and the client will need to contact it to request an application form (FSCS), and that it cannot confirm protection until a firm fails and evidence is reviewed. The client must show the money came from a qualifying event. Nothing needs to be done with the FSCS unless the bank, building society or credit union fails.
Which life events qualify
The FSCS lists these qualifying events:
- the sale of the client's main home;
- a property purchase or equity release;
- an inheritance;
- insurance payouts;
- retirement benefits;
- redundancy;
- divorce or the dissolution of a civil partnership;
- compensation claims, for example for unfair dismissal or wrongful conviction;
- personal injury compensation;
- disability or incapacity benefits.
Where property is involved, it must be the client's main residence. Proceeds from the sale of a buy-to-let or a second home should not be assumed to qualify. If a client's situation does not obviously fit the list, check the FSCS's guidance rather than guessing.
When the six months start, and why moving money does not reset them
The six months run from when the money "becomes legally transferable to you or is first credited" (FSCS). Two consequences matter in practice.
- The clock may start earlier than the client thinks. If the money became legally transferable before it reached the account, the period can already be running.
- Moving the money does not restart it. Transferring the balance to another bank or account does not give the client a fresh six months.
So the date matters, and it should be on file. Record the date of the event, the date the money was first credited, and the source of that information, such as a completion statement or a payment confirmation.
What advisers should do
Temporary high balance protection is a safety net for a short period. It does not replace a plan. A practical approach for a client holding a large sum after a life event:
1. Identify the event and confirm it qualifies
Match the event to the FSCS list. Note whether it involves the client's main residence. If in doubt, check the FSCS's current guidance and record what you found.
2. Record the key dates
Write down when the money became legally transferable or was first credited, and work out the date six months later. Put that date in the diary.
3. Help the client keep the evidence
Because, if the bank failed, the client would need to claim and show where the money came from, suggest they keep the documents that prove the event and the payment, such as a completion statement, a will or estate account, a settlement letter or a pension payment notice. Keep a copy on file if appropriate.
4. Agree a plan before the window ends
Decide, with the client, where the money will go and when. That may involve spreading cash across institutions so each total sits within £120,000, investing part of it, repaying debt, or a mix. Each route is a separate piece of advice with its own suitability work.
5. Check every institution, including shared licences
Once the money is spread, the standard rules apply. Brands sharing a banking licence are treated as one bank, and the £120,000 limit applies to the total across them (FSCS). Add the client's existing balances before choosing where new money goes.
6. Explain it plainly
Tell the client what is protected, for how long, and that protection above the standard limit depends on making a claim with evidence. PRIN 2A.5.3R requires communications that "equip retail customers to make decisions that are effective, timely and properly informed" (PRIN 2A.5). A timely, clear explanation of the six-month window is a good example.
Common misunderstandings to correct
- "The money is protected indefinitely." No. The extra protection lasts six months per qualifying event.
- "If I move it, I get another six months." No. Moving the money does not restart the period.
- "Any property sale counts." No. Where property is involved, it must be the main residence.
- "It is paid automatically like normal protection." No. If the provider fails, the client must request an application form and provide evidence, and the FSCS aims to pay within three months if the claim is eligible and the evidence is provided.
- "It covers any large balance." No. It covers balances from qualifying events only.
Recording it on file
A short note on the file protects the client and the firm. It should show the qualifying event, the dates, the evidence the client holds, what you explained, and the agreed plan with a target date. When the money is placed, the cash recommendation should show the FSCS position for each product and the date it was checked. Our guide to the FSCS limit of £120,000 covers the standard rules, and cash savings advice for advisers sets out how to evidence the recommendation.
When the time comes to place the money, Reckoner helps with that step. The deposit amount rules out unfundable products and flags FSCS limits as it is entered, and rates, terms and FSCS status are checked against the live market before the dated, adviser-signed report is written. Confirming whether temporary high balance protection applies stays with the adviser and the client.
Frequently asked questions
How much do FSCS temporary high balances cover?
According to the FSCS, up to £1.4 million for six months per qualifying event, and unlimited where the money relates to personal injury, disability or incapacity. Check the FSCS's current rules before relying on this.
When does the six-month period start?
From when the money becomes legally transferable to the client or is first credited. Moving the money to another account does not restart the period.
Is temporary high balance protection paid automatically?
No. If the provider fails, the client must contact the FSCS to request an application form and provide evidence of the qualifying event. The FSCS aims to pay within three months if the claim is eligible and the evidence is provided.
See how Reckoner builds a dated, evidenced cash recommendation, or book a twenty-minute demo on Microsoft Teams with Adam Booth, run live on a demo firm with nothing to prepare.
