From 1st December, the Financial Services Compensation Scheme (FSCS) limit for deposits held with PRA-authorised institutions increased from £85,000 to £120,000.

That’s per depositor, per institution, and it’s the first rise since 2017.

The updated threshold has been confirmed by the Prudential Regulation Authority (PRA) and approved by HM Treasury. It follows a consultation earlier in the year and considers recent inflation data.

For business owners, this change may prompt an important question: Is it time to review your cash reserves?

If your business holds reserves for working capital, payroll or future investment, this increase offers a greater safety net but also a timely opportunity to consider whether your current approach to cash is still fit for purpose.

Temporary High Balances (THB) rising too

The limit for THBs, which cover temporary spikes in account balances from qualifying life events (property sales, insurance payouts, etc.), will also rise from £1 million to £1.4 million.

What you should be thinking about

• The limit applies per PRA-authorised institution, not per brand. So, if your bank operates under a shared licence with others, your protection might not be as broad as you think.
• Spreading funds across different institutions could improve protection.
• A review of your cash reserves could identify whether funds are best held, invested, or extracted from the business.

How we can help

At Wilson Partners, we work closely with owner-managed businesses to help them get clarity on what their business really needs to hold in cash, not just for today, but to fuel the plans for tomorrow.

Whether you need support with a simple cash flow review or want to explore how your reserves could help move your personal or business goals forward, we’re here to challenge, advise and support.

Let’s help make your cash work harder, not just sit still.