New rule alert for anyone with a UK bank account with less than £120,000

UK bank customers are set to have more of their money safeguarded if a financial provider goes under, thanks to new rules coming into effect.

From 1 December, up to £120,000 of your cash will be returned to you if a UK-authorised bank, building society or credit union goes bust. This is a significant increase from the current cap of £85,000, which has been in place since 2017.

This limit is part of the Financial Services Compensation Scheme (FSCS), and the higher level was confirmed today by the Prudential Regulation Authority (PRA).

The compensation limit applies per person, per authorised firm, and is typically paid automatically within seven days of the firm going under.

If an individual holds money in several accounts with multiple banks that are part of the same banking group, and