What is FSCS Protection?
The Financial Services Compensation Scheme (FSCS) is the UK's statutory deposit guarantee fund. If a PRA/FCA-authorised UK bank or building society fails, the FSCS automatically compensates depositors up to £85,000 per eligible person, per banking licence (£170,000 for joint accounts) within 7 days, plus up to £1 million for temporary high balances (such as proceeds from selling a primary residence) for up to 6 months.
The Shared Banking Licence Trap
FSCS protection applies per banking licence, not per brand name. For example, Halifax, Bank of Scotland, and Birmingham Midshires all share a single banking licence under HBOS plc—meaning £60,000 in Halifax plus £50,000 in Bank of Scotland only receives £85,000 total protection, leaving £25,000 uninsured.