The Financial Services Compensation Scheme (FSCS) can pay compensation if a UK-authorised financial firm fails and your claim is eligible. For money held with a UK-authorised bank, building society or credit union that failed after 30 November 2025, FSCS says it automatically compensates up to £120,000 per eligible person, per firm. A cash ISA is a tax wrapper, not a second compensation scheme, and ordinary crypto is not the same product as a bank deposit.
Key takeaways
- FSCS protection is for eligible claims when a UK-authorised firm fails. It is not cover against a fall in value.
- From 1 December 2025 the deposit limit is £120,000 per eligible person, per bank, building society or credit union.
- Joint deposit accounts use that same per-person limit. Certain temporary high balances can be protected up to £1.4 million for six months.
- The ISA allowance is £20,000 in the 2026/27 tax year. That is a tax rule, not an FSCS limit.
- The FSCS summary used here does not describe ordinary crypto as an automatically protected deposit. Security tokens and e-money tokens can sit inside regulation, so the product matters.
What FSCS protection covers for savings, ISAs and crypto
FSCS says it covers a range of products if a UK-authorised firm fails. The list includes deposits, insurance, investments, pensions, mortgage advice and certain other regulated services. The Financial Conduct Authority (FCA) and the Prudential Regulation Authority set the compensation limits and the rules. FSCS also points people to its eligibility rules, because not every claim is payable.
Savings held as a deposit are the clearest case on the FSCS “What we cover” page. If you hold money with a UK-authorised bank, building society or credit union, and that firm failed after 30 November 2025, FSCS says you do not need to apply. It will compensate you automatically, up to the deposit limit.
An ISA does not create its own compensation scheme. It changes how eligible savings or investments are taxed. Crypto is different again: the FCA describes it as a digital representation of value or rights, and the FSCS deposit rules do not automatically follow a token into a private wallet or an unregulated exchange.
How much of your savings is protected if a bank fails?
On 1 December 2025 the deposit limit rose to £120,000. FSCS states that limit per eligible person, per bank, building society or credit union. It is not one £120,000 pot for every account you hold in the UK. Money with a different bank, building society or credit union is looked at against that firm’s own limit.
Joint accounts are eligible for the same limit of £120,000 per eligible person. Two eligible people are not described as sharing a single £120,000 cap. FSCS also protects certain qualifying temporary high balances up to £1.4 million for six months from when the amount was first deposited. The summary does not list every qualifying event, so confirm the category with FSCS before you rely on the higher figure.
A worked example, using only those published caps: £100,000 with Bank A sits inside the £120,000 deposit limit. A further £50,000 with a different bank, building society or credit union is measured against that second firm’s limit. If both sums are with the same firm, £150,000 is above the £120,000 per-person limit, so £30,000 sits outside the automatic deposit compensation described on the page. This is an illustration, not a forecast of a payout. Brand names can be confusing, so use the FSCS bank and savings protection checker for the firms you use.
Are cash ISAs covered in the same way as ordinary savings?
GOV.UK explains that you can save tax-free with an Individual Savings Account. In the 2026 to 2027 tax year the most you can pay into ISAs is £20,000, in one account or split across accounts. You must be 18 or over to open an ISA. You cannot hold an ISA with someone else. Interest, income and capital gains inside an ISA do not need to be declared on a tax return.
A cash ISA is simply an ISA wrapper for cash savings, and GOV.UK says the £20,000 annual allowance can be split across the four ISA types it lists. Where that money is held with a UK-authorised bank, building society or credit union, it is money with that firm, so the deposit rules above are the ones to read. The £20,000 allowance does not raise the £120,000 deposit limit, and the deposit limit does not increase how much you may pay in during the tax year.
Your ISA does not close when the tax year ends. Savings can stay tax-free for as long as they remain in the ISA, so a cash ISA balance can be larger than this year’s allowance. FSCS still looks at eligible deposits with the firm, not at how many years you have used. For how the account itself works, see What Is an ISA? How Cash ISAs Work in the UK.
GOV.UK describes four ISA types. Its examples include cash ISAs, stocks and shares ISAs, innovative finance ISAs and Lifetime ISAs. You can split the £20,000 allowance across types in one tax year. GOV.UK notes that only one Lifetime ISA can be paid into per tax year, and you should check GOV.UK for the current annual payment limit before opening one. To open a Lifetime ISA you must also be under 40.
FSCS says it can cover investments if a UK-authorised firm fails, as well as deposits. A stocks and shares ISA holds investments, not a cash deposit, so the £120,000 deposit limit should not be assumed to be the figure for those holdings. The FSCS summary relied on here says regulators set the limits and that eligibility rules decide which claims are payable. It does not publish a separate investment number in that summary. Check FSCS for the investment limit that applies to the firm and the product.
An innovative finance ISA is a further type, and GOV.UK shows it being used inside the same £20,000 allowance. That is a tax rule. It is not, by itself, confirmation of what would be paid if a platform failed. Rules on whether specific cryptoasset-related products can be held in an ISA can change, so check the current GOV.UK guidance and ask the provider before assuming any tax wrapper applies. The tax wrapper does not turn that note into a bank deposit covered by the cash limit.
What can FSCS realistically do for crypto?
The FCA describes crypto as a digital representation of value or rights, secured by encryption and typically recorded on a distributed ledger, often a blockchain. It also notes a surge in speculative trading, meaning people trading because they have heard the price may rise, rather than because of evidence. Scammers are active around these markets.
Regulation is not all or nothing. The FCA says security tokens may fall inside its perimeter where they amount to a specified investment, for example where they provide ownership, repayment of a sum, or a share in future profits. E-money tokens that meet the e-money definition fall under the Electronic Money Regulations. On 30 June 2026 the FCA published final rules and guidance that will apply to cryptoasset firms granted permission under FSMA on or after 25 October 2027.
None of those statements says that ordinary coins are protected like a savings account. The FSCS “What we cover” summary lists deposits, insurance, investments, pensions, mortgage advice and certain other regulated services. It does not describe a general crypto token, a private wallet or a typical exchange balance as an automatically protected deposit. A product that is actually a security or e-money, offered by a UK-authorised firm, is a different question, and only the eligibility rules can answer it.
If the firm is not UK-authorised, the condition FSCS states at the outset is not met. Rules that apply from 25 October 2027 do not change the status of a firm that fails before it has that permission. A lower market price is also not a firm failure. FSCS compensation, where it applies, responds to eligible failure of a firm, not to a token being worth less than you paid.
What FSCS protection does not do
FSCS is not a substitute for checking who you are dealing with. The FCA says scams can be sophisticated and can look like the real thing. Warning signs include contact you did not expect, pressure to act quickly, and rewards that sound too good to be true, such as high returns tied to a short deadline. The FCA would never ask you to transfer money to it, and it would never ask for bank PINs or passwords.
Deposit protection does not undo a payment you sent to a fraudster who is not your bank. It does not replace passwords, records or wallet recovery details. It is also not a credit file. Compensation cover and what lenders see about your borrowing are separate subjects. If you want the second of those, read What a Credit Report Shows and Who Can See It.
For crypto scam patterns, including rug pulls, read How To Avoid Crypto Scams And Rug Pulls: 2026 Protection Guide, then check the firm on the FCA’s own consumer pages rather than trusting an advert or a direct message.
Checklist: questions to ask before you assume you are covered
- Is the firm UK-authorised? FSCS describes cover when a UK-authorised firm fails.
- Is this a deposit with a bank, building society or credit union, or something else, such as an investment, an innovative finance product, a crypto token, e-money or a security token?
- If it is a deposit and the firm failed after 30 November 2025, is the balance within £120,000 per eligible person, per firm?
- Is another eligible person on the account? The joint-account limit is per person, not one shared £120,000.
- Could this be a qualifying temporary high balance? The higher protection is up to £1.4 million, and only for six months from first deposit. Confirm it with FSCS.
- If it is an ISA, which of the four types is it? The 2026/27 payment cap is £20,000 across your ISAs. That does not add a second FSCS limit.
- If it is a Lifetime ISA, are you within one Lifetime ISA and the £4,000 payment cap for the tax year?
- If crypto is involved, are you holding a token, an exchange balance, or a regulated note, security or e-money product? Do not assume the deposit limit applies.
- Are you being rushed, or contacted out of the blue? Those are FCA scam warning signs. Stop and check the firm.
- For deposit accounts, have you used the FSCS bank and savings protection checker rather than guessing from a brand name?
FAQ
Does the £20,000 ISA allowance mean FSCS covers only £20,000?
No. £20,000 is the GOV.UK limit on what you can pay into ISAs in the 2026/27 tax year. £120,000 is the FSCS deposit limit per eligible person, per bank, building society or credit union, where the firm failed after 30 November 2025. They answer different questions.
Are joint savings protected only up to £120,000 in total?
FSCS says joint accounts are eligible up to £120,000 per eligible person. The published deposit limit is per person, not one shared ceiling of £120,000 for the whole account.
If my cash ISA and current account are at the same bank, do I get the limit twice?
The deposit limit is per eligible person, per bank, building society or credit union. FSCS does not describe a fresh £120,000 for every account, or for every ISA, at that same firm. Use the protection checker, because the brand on the app is not always the legal firm.
Will the FCA’s new crypto rules mean losses are compensated?
Not on the facts in these sources. The final rules apply to cryptoasset firms granted FSMA permission on or after 25 October 2027. A fall in a token’s price is not the failure of a UK-authorised deposit-taker. Only a product that is actually eligible, at a firm that is actually authorised, could even raise an FSCS question.
Do I need to make a claim if my bank fails?
For deposits at a UK-authorised bank, building society or credit union, FSCS says you do not need to do anything. It compensates you automatically, within the limit. Other products, including investments, can follow different rules, so read the eligibility pages for those claims.
What to do next
Treat FSCS as a backstop for eligible firm failure, then match the rule to the product. For cash savings, confirm the UK firm and whether the balance sits within £120,000 per eligible person at that firm, including a cash ISA held there. For a stocks and shares ISA or an innovative finance ISA, use the investment eligibility rules rather than the deposit figure. For crypto, do not assume cover unless you can point to a regulated product and a UK-authorised firm.
This is general information, not a personal recommendation. Limits and permissions change, and only FSCS can confirm a claim. The practical next step is the FSCS bank and savings protection checker for deposits, plus the FCA’s scam warnings before you send money to anyone who contacted you first.
Sources
- FSCS: What we cover
- GOV.UK: Individual Savings Accounts (ISAs)
- GOV.UK: How ISAs work
- FCA: Crypto: The basics
- FCA: Cryptoassets: our work
- FCA: Protect yourself from scams
For decisions about your own money, speak to a regulated financial adviser, or get free, impartial guidance from MoneyHelper.
