How to Protect Savings Above the FSCS Limit

A large cash balance is a pleasing problem to have. It is also a problem that behaves like a house guest who stays just long enough to make you notice the plumbing. Below a certain level, most of us leave savings where they land and focus on life. Above that level, you start to realise that cash is not just cash. It is a claim on a bank. It is a set of rules. It is, in the wrong circumstances, a reminder that stability is a system, not a mood.

In the UK, the Financial Services Compensation Scheme exists to stop ordinary savers being flattened by a bank failure. It is the quiet safety net beneath the polite fiction that private banks do not wobble. The scheme protects eligible deposits up to a set limit per person, per authorised firm. That last phrase matters more than people think. Not per account. Not per brand. Per authorised firm, which is banking speak for the underlying licence.

As of 1 December 2025, the standard FSCS deposit protection limit is £120,000 per eligible person, per authorised bank, building society, or credit union. If you hold more than that with a single authorised firm, the amount above the limit is exposed if the institution fails. Most of the time, nothing happens. The point is not to panic. The point is to arrange your money so that if something does happen, your savings are not relying on luck, goodwill, or the speed at which a call centre answers.

Protecting savings above the FSCS limit is not complicated. It is mainly about understanding how the rules are counted, then spreading cash with intention. It is also about resisting the temptation to treat protection as an investment strategy. The goal here is safety and access. Your ambition should be calm.

FSCS deposit protection applies to money held with UK authorised banks, building societies, and credit unions. The standard limit is £120,000 per eligible person, per authorised firm. If you have multiple accounts with the same authorised firm, they are added together for the purpose of the limit. Current accounts, savings accounts, and cash ISAs all sit in the same pot when they are with the same authorised firm.

Joint accounts are treated differently. Each eligible person in a joint account gets their own limit. In practice, that means a joint account held by two people is protected up to £240,000 with that firm, assuming both account holders are eligible.

It is also worth knowing that the scheme is designed to work automatically for most deposit claims. You should not be filling in forms in a panic if an institution fails. The compensation process is intended to be swift for deposits. That is the theory and, historically, it has generally worked. Your job is to make sure the sums at risk are within the protected envelope in the first place.

The detail that catches experienced people is not the size of the limit. It is the definition of a firm. A banking group can operate multiple brands that look separate to the customer while sharing the same authorisation. If you split £120,000 between two brands that share a licence, you have not diversified your protection. You have just changed the logo on the statement.

This is where a little homework saves a lot of worry. Before you spread large balances across banks, check whether those brands are covered separately or under the same authorisation. It is not enough that the apps look different. The protection follows the licence.

A practical habit is to treat this as part of opening an account, like checking the interest rate or the withdrawal rules. If you cannot quickly confirm the authorisation structure, assume nothing and choose another institution where the separation is obvious.

The cleanest way to protect savings above the FSCS limit is to split money across different authorised firms so each slice sits within £120,000 per person. This is less glamorous than it sounds. It is essentially creating several smaller piles and resisting the urge to keep everything under one roof because it feels tidy.

If you are holding a large amount as an individual, the arithmetic is straightforward. Keep no more than £120,000 per authorised firm in total deposits and cash ISAs combined. If you want an extra margin for interest payments, pushing you slightly over, leave a little headroom. It is not romantic, but it is the sort of conservatism that looks very intelligent when something breaks.

If you are managing cash for a couple, you can use joint and individual accounts strategically. One approach is to hold up to £240,000 in a joint account with one authorised firm, then hold up to £120,000 each in individual accounts with other authorised firms. This can protect a surprisingly large total without becoming complicated.

The important point is that the protection is per eligible person, per authorised firm. Once you think in those units, the planning becomes obvious.

Joint accounts are a powerful tool for protection because they effectively double the standard limit with one firm. They are also a tool that requires trust and clarity. If you and your partner share a joint account, make sure you are comfortable with how it is operated, who has access, and what happens if one of you wants to move money quickly.

From a purely practical angle, joint accounts can also simplify household cash management, particularly for emergency reserves and short-term goals. Just remember that all joint funds are still exposed to the same single-firm risk above the combined protected limit. Joint does not mean unlimited. It means shared entitlement to protection.

If the idea of a large joint balance makes either party uneasy, use joint accounts for a defined portion and keep the rest in individual accounts. Calm money is better than clever money.

Sometimes the problem is not that you have chosen to hold a lot of cash. It is that life has briefly made it unavoidable. You sell a home. You receive an inheritance. A redundancy payment lands. A pension lump sum arrives. The balance spikes, and suddenly, you are sitting above the standard protection limit through no special ambition of your own.

FSCS offers additional protection for certain temporary high balances. In most cases, this can protect up to £1.4 million for six months from when the money is first credited, provided it comes from a qualifying life event, and you can evidence it. The detail varies by event type and documentation, and the cleanest way to handle it is to assume that you have a six-month window to put a longer-term structure in place.

The mistake people make is treating the temporary protection as a reason to do nothing. Use it as breathing space. Move deliberately. Choose accounts. Consider where funds ultimately belong, whether that is spread across banks, placed into a home purchase, or moved into investments once you have decided on risk. A temporary high balance is meant to stop you from being punished for being mid-transition. It is not meant to become a lifestyle.

For savers who want to reduce reliance on a single commercial bank, National Savings and Investments has a particular charm. It is backed by HM Treasury rather than FSCS limits in the usual sense. That distinction matters to people who are allergic to unnecessary complexity and who would rather sleep than chase marginal differences in interest rates.

NS and I products can be useful as part of a protection strategy, particularly when you have large balances and want an anchor that behaves differently from a bank deposit. Premium Bonds are the most famous example, although they are a different proposition from a savings account because the return is prize-based rather than interest-based. Other products may be available depending on current offerings.

The broader point is that government-backed savings can add variety to your safety structure. It is not always the highest-paying option. It is often the option that keeps your risk narrative simple.

Cash ISAs are tax-efficient. They are not magically safer. If your cash ISA is held with a UK authorised bank or building society, it is generally covered under the same FSCS deposit protection as other deposits with that authorised firm. That means the cash ISA balance counts towards the same £120,000 per person limit at that firm.

This matters because people often build ISA balances over years, then add new savings elsewhere at the same provider, and accidentally create a large exposed sum. The ISA wrapper is about tax. The protection is about the institution behind it.

If you have a large cash ISA balance, it can be worth spreading ISA holdings across different providers over time, particularly if your non-ISA cash is also concentrated. The objective is not to make your life administratively miserable. It is to avoid building a single point of failure by accident.

Some savers try to “diversify” by opening multiple accounts with the same provider, or by using different brands within the same group. This feels organised. It also does not change the protection position if those accounts sit under the same authorised firm.

Multiple accounts can still be useful for budgeting, goals, and access. They are not a protection strategy. Protection comes from separation by an authorised firm, not separation by product.

If you want to keep a long relationship with a main bank for day-to-day life, do it. Just treat that bank as one slice of your protected structure, not the entire pantry.

Some people keep cash on an investment platform, perhaps as uninvested cash awaiting deployment. This is where terminology starts to matter. Platform cash might be held in a client money account and may benefit from certain protections, but the regime can differ from simple bank deposit protection, and it can depend on how the cash is held and with which banks the platform places it.

The sophisticated truth is that protection is rarely one size fits all once you leave plain deposits. You may have protections relating to client money rules, segregation, and compensation schemes, but they are not identical to deposit protection, and they are not intended to cover market losses.

If you are holding large sums as cash for safety, plain deposits with clear protection limits can be simpler. If you are holding cash briefly as part of an investment strategy, the platform arrangement may be fine. The mistake is to assume that cash held anywhere behaves like cash in a bank account. Ask the unglamorous questions before you rely on it.

Companies can also be eligible for FSCS deposit protection, but eligibility depends on the business type and circumstances. The principle remains similar. The limit is per eligible depositor, per authorised firm.

If you run a limited company and you are holding significant cash in the business, treat protection as part of treasury management. Spread cash across authorised firms. Keep records. Avoid concentrating all operating funds in one place simply because it is familiar. Businesses are often more exposed because they can accumulate cash from trading, tax reserves, or a funding round, then leave it sitting while attention shifts back to product and clients.

Large company balances can also involve additional considerations such as multi-currency accounts and operational banking needs. Even then, the basic discipline holds. Avoid single points of failure.

The best approach is not constant tinkering. It is a simple system you can maintain. Decide how much you want in instant access for emergencies. Decide how much you are holding for known spending in the next year or two. Decide how much is genuinely surplus and could be invested rather than left as cash.

Then structure deposits so each authorised firm holds no more than the protected amount per person, with headroom for interest. Use joint accounts where they genuinely suit your household. Use temporary high balance protection as breathing room, not as a long-term plan. Consider government-backed options if you want an additional layer of reassurance. Keep a simple record of where money sits and under which authorisation.

The goal is to make the system so straightforward that you will actually follow it.

Most of the time, banks do not fail in a way that harms ordinary depositors. That is precisely why people become complacent. Protection planning is a bit like having a spare key. You do not think about it until you need it. Then you are grateful you were not relying on optimism.

Keeping large savings protected is not about being dramatic. It is about behaving like someone who understands that financial systems are robust until they are not. The UK’s deposit protection framework is strong. It works best when you arrange your cash so it can do its job without argument.

If you have savings above the FSCS limit, the fix is usually simple. Spread deposits across different authorised firms. Use joint capacity intelligently if it fits your life. Be aware of temporary high balance rules when money spikes. Keep your structure tidy enough that you do not dread reviewing it. That is the quiet luxury here. Not a higher rate. Not a clever trick. Just the feeling that your savings are protected by design, not by hope.