From 1 January 2016, deposits made by private individuals and small businesses to any authorised firms are protected by the Financial Services Compensation Scheme to a limit of £75,000 (previously £85,000).
Depositors may still receive a share of their savings above this limit following any distribution of assets as part of the insolvency process for a failed bank. This would be determined by the insolvency practitioner and any recovery would vary according to the circumstances of the specific failure.
Temporary high balances will continue to be protected for private individuals. Temporary high balances are the result of specified major life events that lead to a large amount of money being held in a person’s account for up to six months (e.g. sale proceeds, redundancy payments and state benefits). Provided that sufficient evidence is provided by the individual, temporary high balances will be protected up to £1million per life event, with unlimited cover for personal injury claims.