UK savers will have their deposits protected up to £110,000 if their bank or building society goes bust according to proposals put forward by the Bank of England. This represents a near-30% hike from the current £85,000 limit and would mark the first substantial change to the savers’ protection scheme since the 2008 banking crisis. The increase, announced by the Bank’s regulatory arm, the Prudential Regulation Authority, accounts for inflation and is intended to give consumers confidence in the safety of their money. Only the first £2,000 of savings were fully protected before the crash in 2007, while 90% of the next £33,000 would be paid back, resulting in losses for individuals if their lenders failed. The PRA will consult on the new limit, and if approved, it would cover the savings of retail and SME customers from 1 December. The issue of deposit protection has been debated since the mini-banking crisis of 2023, when lenders including Credit Suisse and Silicon Valley Bank collapsed, prompting fears about the lower deposit protection levels compared to the US. The Bank of England consultation highlights the importance of depositor protection in maintaining confidence in the financial system, making it a key element of the regulatory framework to mitigate the impact of banking failures.

Source: https://www.theguardian.com/money/2025/mar/31/uk-savers-110000-protected-pra-banking