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Can you claim FSCS compensation if a bank or building society fails?
Yes, you may be able to make a claim through the Financial Services Compensation Scheme (FSCS) if a UK bank or building society fails. The FSCS is the UK’s deposit protection scheme and is designed to protect eligible savers if their bank cannot return their money. It exists to give customers peace of mind if a firm becomes insolvent.
If your money is covered, the FSCS can usually compensate you automatically. In many cases, you do not need to submit a formal claim at all. The scheme aims to pay eligible customers quickly, often within seven working days for most bank and building society deposits.
How much money is protected?
The FSCS normally protects up to £85,000 per person, per authorised firm. This limit applies to the total amount you hold with that bank or building society, including savings and current accounts. If you have more than one account with the same provider, the balances are usually added together.
For joint accounts, each account holder is usually protected up to £85,000 each, meaning up to £170,000 in total for a joint account. If your bank operates several brands under one banking licence, the protection limit still applies across those brands combined. It is worth checking whether different account names are actually covered by the same authorisation.
When might you need to make a claim?
In many bank failure cases, the FSCS and the Bank of England work together to move eligible deposits to another bank or pay compensation automatically. You may need to take action if the FSCS asks for updated details, if your account information is incomplete, or if your circumstances are unusual. This can include trust accounts, business accounts, or accounts held in a representative capacity.
If you believe your money should be protected but you have not been contacted, you can check your eligibility directly with the FSCS. You may also need to make a claim if the failed firm’s records are unclear or if you think the balance they hold is wrong. Keeping statements and account records can help support your case.
What is not covered?
The FSCS does not protect every type of financial product. For example, shares, investments, and many insurance products are not covered in the same way as bank deposits. If you held money in an account linked to an investment product, the protection may be different or unavailable.
The scheme only applies to firms authorised by the Prudential Regulation Authority or the Financial Conduct Authority and covered by the FSCS rules. If the provider is based overseas, protection may depend on a different compensation scheme. Always check the firm’s status before assuming your money is covered.
What should you do next?
If your bank or building society has failed, check whether the institution is FSCS-protected and confirm how much you have deposited. Look at the account holder names, the type of account, and whether any linked brands share the same banking licence. This will help you understand whether your savings fall within the protection limit.
If you think you may need to claim, contact the FSCS or follow any instructions sent to you after the failure. Keep hold of account numbers, statements, and any correspondence from the bank or administrator. Acting quickly and checking the details can make the process much easier.
Frequently Asked Questions
FSCS compensation claim for bank or building society failure is the process of seeking compensation from the Financial Services Compensation Scheme when a UK bank or building society is unable to return eligible deposits or certain other protected money because it has failed.
People, businesses, and some other eligible entities may be able to claim if they held protected deposits or other covered products with a firm that has failed and the money is eligible under FSCS rules.
For protected deposits, FSCS typically covers up to 85,000 pounds per person, per authorised bank or building society, or up to 170,000 pounds for certain joint accounts, subject to FSCS rules and exceptions.
Protected accounts commonly include current accounts, savings accounts, cash ISAs, and some prepaid or e-money balances held with eligible firms, but protection depends on the specific product and provider.
In many cases, you do not need to make a formal application because FSCS or the failed firm's administrator may contact you automatically, but if required you can submit a claim through FSCS using your account details and identity information.
Many straightforward deposit claims are paid within days or a few weeks after a firm fails, but more complex claims can take longer if FSCS needs to verify ownership, balances, or eligibility.
You may need proof of identity, account statements, account numbers, correspondence from the failed firm or administrator, and any documents showing joint ownership or trust arrangements if relevant.
Yes, joint accounts are usually protected separately for each account holder, so up to 85,000 pounds may apply to each person, depending on the structure of the account and the firm involved.
Some business accounts are protected if the business meets the FSCS eligibility rules, but coverage can vary by business type, account type, and whether the business is within the scope of FSCS protection.
If your bank or building society fails, your eligible savings are usually protected up to the FSCS limit, and FSCS aims to repay covered money as quickly as possible so you can access it again.
You can claim, but FSCS protection on deposits is generally limited to 85,000 pounds per person per firm, so any amount above that limit may not be compensated.
Yes, certain temporary high balances may be protected for a limited period if they come from specific life events such as property transactions, inheritances, or insurance payouts, subject to FSCS rules.
Yes, eligible compensation normally includes the balance held and any interest due up to the date the firm failed, provided the interest is covered under the account terms and FSCS rules.
You should wait for updates from FSCS or the failed firm's administrator, keep all account records and correspondence, and check whether your money is within the FSCS protection limit and eligibility rules.
Payment methods vary, but FSCS commonly pays by bank transfer or cheque, and the available option depends on the claim process and the information you provide.
A failed bank or building society and an FSCS compensation payment should not usually harm your credit score, but any linked borrowing or missed payments would need to be handled separately.
Yes, you may be able to claim as an attorney, executor, administrator, or other authorised representative if you have the legal authority and supporting documents.
If the firm was transferred to another provider, your money may already be with the new provider, and FSCS protection usually applies based on the original failed firm's position and any applicable transfer arrangements.
Often it is automatic for straightforward cases, especially deposit accounts, but some claims need additional checks or customer action if FSCS does not already hold enough information.
You can check the status through communications from FSCS, the failed firm's administrator, or the FSCS website, where updates on failed firms and claim instructions are usually posted.
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