Increase of more than 40% from current figure of £85,000 will give more cover if financial firm goes bust
The amount of a customer’s money protected if a UK bank or building society goes bust will rise to £120,000 next month, providing a boost to the nation’s savers.
The new deposit protection limit, a 41% rise from the current limit of £85,000, is higher than expected and takes effect on 1 December.
The original plan was that UK savers would have up to £110,000 of their deposits protected if their bank, building society or credit union went out of business. However, it appears this is one of the rare areas where consumers are benefiting from the fact that UK inflation – currently 3.8% – is higher than officials and the government would like it to be, at nearly double the 2% target.
Announcing the new rules, the Bank of England’s regulatory arm, the Prudential Regulation Authority, said the proposed new limit of £110,000 had been increased “in light of consultation feedback and to reflect the latest inflation data”.
