The Financial Services Compensation Scheme (FSCS) is the UK’s statutory compensation scheme for customers of authorised financial services firms. In plain English: if a UK bank, building society or investment provider fails, the FSCS steps in to pay back eligible money you’ve lost – up to set limits – so a provider failure doesn't have to mean losing your savings.
The scheme has been in place since 2001 and has helped protect the wealth of millions of UK consumers. FSCS protection is free and automatic – you don’t need to apply or pay any fees. As soon as you open an account with an FCA-authorised firm that’s covered by the scheme, you’re protected.
In December 2025, the protection limit for cash deposits was increased – the first major uplift in over a decade – giving UK savers significantly more cover than before. The rest of this page explains what’s covered, how much and exactly how FSCS protection applies to your money at Prosper.
How much of my money is protected by the FSCS?
The amount the FSCS will pay back depends on the type of account you hold. There are two headline FSCS protection limits to be aware of, plus extra cover for joint account holders and short-term spikes in your balance.
The £85,000 limit
Originally, every UK consumer was protected up to £85,000 per person, per authorised financial institution. That figure stood for years and is still the FSCS protection limit that applies to investment accounts – including SIPPs (Self-Invested Personal Pensions) and Stocks and Shares ISAs.
Anything above £85,000 with the same firm wouldn't be covered by the FSCS. That said, investments work differently from cash deposits: they're typically held in custody and ringfenced from the provider's own assets, which is a separate protection mechanism designed to mean FSCS compensation is rarely needed in the first place. We explain how this works at Prosper further below.
The £120,000 limit
In December 2025, the FSCS protection limit for cash deposits was raised from £85,000 to £120,000 per person, per authorised financial institution.
This higher £120,000 limit applies only to cash deposit accounts, including:
Easy access savings accounts
Fixed term savings accounts
Notice savings accounts
Current accounts
Cash ISAs
The previous £85,000 limit still applies to money held in investment accounts – including General Investment Accounts (GIAs), Self-Invested Personal Pensions (SIPPs), and Stocks and Shares ISAs.
Banks that share a banking licence
There’s one important detail that catches a lot of savers out: the £120,000 FSCS limit applies per banking licence, not per brand. Several UK banks own multiple savings brands that all sit under a single FCA/PRA authorisation – a high street bank and its online-only sister brand, for example, may share one licence.
If you hold deposits across two brands that sit under the same licence, the FSCS treats the balances as a single deposit. The £120,000 cap applies to the combined total, not £120,000 per brand. So opening a second account with a different name with the same banking licence won’t double your protection.
Before spreading your savings across providers to maximise FSCS cover, it’s worth checking the FSCS bank and building society checker to confirm which brands sit under which licence. It’s a quick step that can prevent unintentionally going over your protection limit.
Joint accounts
If you hold a joint current account or joint savings account, FSCS protection effectively doubles. Joint account holders benefit from £240,000 of cover (£120,000 each), instead of the standard single-holder £120,000 limit.
In practice, each account holder’s share of the balance counts towards their own individual FSCS limit. So if you also hold a sole savings account at the same bank, both balances combine when working out how close you are to your personal £120,000 cap.
Temporary high balances
The FSCS also offers extra cover for what it calls Temporary High Balances – large, one-off sums that briefly sit in your account before being moved or spent. In December 2025, this cap was increased from £1 million to £1.4 million.
You’re covered for up to six months from the date the money is paid in, provided it comes from a qualifying life event such as:
Proceeds from selling your main residence
An inheritance
Insurance pay-outs
Divorce or dissolution settlements
Redundancy pay
Personal injury compensation
To qualify, the money must be held in an eligible account and be clearly identifiable as a temporary high balance. After six months, only the standard £120,000 deposit limit applies.
What products are covered by FSCS protection?
FSCS protection covers a wide range of regulated UK financial products, but the type of cover depends on whether you’re holding cash or investments.
Covered products
The following products are covered by the FSCS, subject to the limits above:
Savings accounts – including easy access, fixed term and notice accounts
Current accounts
Cash ISAs
Stocks and Shares ISAs – covered if the provider fails, but not against investment losses
General Investment Accounts (GIAs) – also covered if the provider fails, not against investment losses
SIPPs – covered if the pension provider itself fails. How FSCS protection applies to a SIPP depends on the nature of any claim (for example, against the SIPP operator, against an underlying investment or against advice you received). In practice, SIPP investments are typically held in custody and ringfenced from the provider's own assets, which means they're largely protected even before FSCS cover is needed. The FSCS website has detailed guidance on pension claims if you'd like more detail.
What is not covered
FSCS protection isn’t designed to protect investors from investment losses. If your investments fall in value because of poor performance, market downturns or your own investment decisions, that’s a normal part of investing and not the kind of risk the scheme is designed to cover.
In short: FSCS protection is there to protect you if your provider fails, not if the markets move against you.
How does FSCS protection work at Prosper?
Prosper is fully authorised and regulated by the Financial Conduct Authority (FCA registration number 991710), and our products are designed so that you benefit from the maximum protection available under the FSCS.
Here’s how it works for each product type:
Cash savings – Prosper’s cash savings products are held with UK banks that are themselves FSCS-protected. All our savings products meet the FSCS eligibility requirements, so you benefit from up to £120,000 of FSCS protection per person, per banking institution.
Investments – General Investment Accounts, Stocks and Shares ISAs, and SIPPs benefit from FSCS protection up to £85,000. On top of that, your investments are held in custody by Prosper’s custodian partner, SECCL – an FCA-regulated firm wholly owned by Octopus Group. Custody means your investments are held in your name and ringfenced from Prosper's and SECCL's own balance sheets, so they shouldn't form part of either company's assets if something went wrong. Ringfencing isn't an extension of the FSCS limit – it's a separate safeguard that works alongside it.
In other words: your cash savings are protected up to £120,000 by the FSCS, and your investments are both protected up to £85,000 by the FSCS and held separately in custody, so even in the unlikely event of a provider failure, your money is well-shielded.