Changes to UK Deposit Protection: What British Expats Need to Know
UK Deposit Protection for Expats
If you live outside the UK but still hold money in a UK bank account, this matters to you.
From 1 December 2025, the UK is increasing its bank deposit protection limit from £85,000 to £120,000 per person, per authorised bank, building society or credit union (subject to licence — see below).
This change affects British expats, overseas residents and anyone holding cash in UK banks while living abroad.
It’s a positive step.
But for many expats, the real protection depends on how your accounts are structured.
Key Takeaways
- UK deposit protection increases from £85,000 to £120,000 per person, per bank (licence) from 1 December 2025.
- Temporary high balance protection rises to £1.4 million for six months for certain life events.
- Protection is based on banking licence, not brand name.
- Many well-known banks share the same licence, reducing your effective protection.
- Joint accounts are protected on a per-person basis.
- Expats holding large cash balances in the UK are often less protected than they think.
Who This Is Relevant For
This article is especially relevant if you:
- Live outside the UK but still hold UK bank accounts
- Have sold (or plan to sell) a UK home
- Are holding cash before investing or moving money overseas
- Are planning to return to the UK
- Have received (or expect to receive) an inheritance
- Keep large cash balances “temporarily” in UK banks
🔗 4 Things To Do When Receiving an Inheritance
Why This Matters for British Expats
When you live overseas, UK bank accounts often become a holding area for:
- Property sale proceeds
- Pension lump sums
- Inheritances
- Business exits
- “Just in case” savings
In my experience, most expats assume:
“I’ve split my money across a few banks, so I’m safe.”
Often, they’re not.
Being overseas makes sorting issues slower and more stressful if things go wrong.
That’s why understanding this properly matters.
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Temporary High Balance Protection – What Expats Need to Know
This is one of the most misunderstood parts of UK deposit protection – and one of the most important.
The temporary high balance protection applies when you suddenly receive a large amount of money due to a major life event.
This includes:
- Selling your main UK home
- Receiving an inheritance
- Receiving an insurance payout
- Certain redundancy or personal injury payments
From 1 December 2025, this temporary protection increases to £1.4 million per person.
However, it only lasts for six months.
This is particularly relevant for expats because large sums often sit in UK accounts while you:
- Decide whether to buy property abroad
- Wait for tax advice
- Arrange cross-border investments
- Plan how to structure money long-term
It is important to note that the protection does not apply to:
- The sale of a second home
- Buy-to-let properties
- Investment properties
And the six-month clock starts from the date the money legally becomes yours, not when you decide what to do with it.
The biggest mistake I see?
People assume they’re protected long-term.
They aren’t.
If nothing is done before the six months end, any amount above the standard £120,000 limit becomes exposed.
Banks That Share a Licence – Where Expats Get Caught Out
This is the most dangerous misunderstanding.
FSCS protection is based on the banking licence, not the brand name.
That means you can hold accounts with different branded banks and still only have one protection limit.
This catches expats out because:
- Accounts are opened years apart
- Banks are chosen for familiarity
- Multiple “backup” accounts are created
Common examples of banks that share the same licence
- HSBC & First Direct
- Halifax, Bank of Scotland & Lloyds
- NatWest & Ulster Bank
- Virgin Money, Clydesdale Bank & Yorkshire Bank
Different logos.
Different names.
One protection limit.
Case Study – British Expats in Poland
Background
Anna (58) and James (62) live in Warsaw.
They’ve lived in Poland for several years and kept multiple UK bank accounts “just in case”.
They then sold their UK home and held £350,000 in UK banks while deciding whether to buy property in Poland.
They assumed: “Different bank names = well protected.”
The Reality
- From December 2025 they each have £120,000 standard protection
- Together, that gives £240,000 protection
- Two of their banks actually shared the same licence, which meant that £110,000 of their money would be unprotected
Because the money came from their main home sale, they qualified for temporary protection of £1.4 million for six months.
But only for six months.
The Solution
We created a clear plan that allowed Anna and James to:
- Map out which banks shared licences
- Restructure their accounts properly
- Use the six-month window wisely
- Put a long-term solution in place
The Outcome
This is exactly the situation many expats find themselves in.
The risk isn’t obvious.
But it is very real.
❓ 10 Frequently Asked Questions (FAQ)
-
What is the new UK deposit protection limit?
£120,000 per person, per authorised bank from 1 December 2025.
-
Does the new UK deposit protection limit apply to expats?
Yes. It applies based on where the bank is authorised, not where you live.
-
How are joint accounts covered by the new UK deposit protection limit?
Each eligible person is protected separately up to £120,000. E.g. a joint account with a £240,000 balance would be fully covered.
-
What is temporary high balance protection?
Up to £1.4 million for six months for certain life events.
-
Does the temporary high balance protection apply to rental property sales?
No. It does not cover second homes or buy-to-let sales.
-
When does the six-month temporary high balance protection period start?
From the date the money becomes legally yours.
-
Do different bank brands give separate deposit protection?
Not always. It depends on the banking licence.
-
Does UK deposit protection cover foreign currency accounts (e.g. EUR, USD) held with UK banks?
Yes. Foreign currency accounts held with UK-authorised banks are normally covered.
-
Does deposit protection apply to money held in UK National Savings & Investments (NS&I)?
NS&I is backed directly by the UK government, which means deposits are 100% guaranteed with no upper limit.
-
Can non-UK domiciliaries or long-term non-residents still claim UK deposit protection?
Yes. Eligibility is based on the bank’s authorisation, not your nationality, domicile or country of residence.
📌 What You Should Do Next (Simple 5-Step Plan)
- ✔️ List all your UK bank accounts
- ✔️ Check which ones share a banking licence
- ✔️ Add up your total cash per authorised institution
- ✔️ Identify any amounts above £120,000 per person
- ✔️ If you’ve had a major life event, check if temporary protection applies
📚 Further Reading
🔗 Expat Life and Financial Planning: The Known Knowns, Unknown Unknowns, and the Unexpected
🔗 Expat State Pension guide (2025/2026 update)
🔗 Retiring Abroad: The Complete UK Expat Guide
🔗 What should I do with my offshore investments when returning to the UK?
🔗 What is an Offshore Bond? An Expat Guide
🔗 Expat ISA Rules: What Can Be Done With an ISA When You Move Abroad?
🧠 Final Thoughts
This change is welcome.
But for expats, protection only works properly when your banking structure is correct.
If you’ve:
- Sold a UK property
- Received (or expect) an inheritance
- Hold large cash balances in UK banks
…it’s worth checking how protected you really are.
Because most people assume they’re safe.
Many aren’t.
Talk to an Expert
UK deposit protection is changing. From 1 December 2025, the standard limit rises from £85,000 to £120,000 per person, per authorised bank, and temporary high balance protection increases to £1.4 million for six months. For expats, the real protection depends on how your money is structured across banking licences, not brand names.
I’m Ross Naylor, a UK-qualified Chartered Financial Planner & Expat Financial Advice Specialist with nearly 30 years’ experience helping British expats protect cash, pensions and estates across borders. I regularly help clients map which banks share a licence, use the six-month window wisely after major life events, and avoid leaving large balances unintentionally unprotected.
If you’ve sold a UK home, received an inheritance, are holding cash before investing or moving money overseas, or you keep “just in case” balances in the UK, I’ll help you confirm how much is really protected and put a smart structure in place.
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