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The , part of the Bank of England, has proposed raising the deposit protection limit of the Financial Services Compensation Scheme (FSCS) from £85,000 to £110,000.

One expert said raising the limit may sent mixed messages around the future of Rob Mansfield, an independent financial adviser at said the higher limit may confuse savers, coming just weeks after was reported to be mulling cutting the cash ISA's £20,000 annual tax-free allowance to £4,000.

Mansfield told NewsPage: "The Government need to be careful about mixed messages as there are rumours that Cash ISAs will be made less attractive to try and promote investment and so there is room for confusion if cash is being rewarded and punished at the same time."

The FSCS scheme guarantees money deposited in accounts are protected in case anything happened to the bank or building society. It means savers can deposit that amount into any single account and guarantee that they will not lose the money even if the bank went bust.

The PRA said the increase was needed to take into account since the limit was last changed, and is designed to give consumers confidence that their money is safe if their UK-authorised bank, building society or credit union fails.

Bob Singh, founder at said: "The deposit protection limit - which represents the maximum amount of money the Financial Services Compensation Scheme typically protects should a depositor's bank, building society or credit union if they become insolvent."

The new FSCS limit which if agreed would apply to firms that fail from 1 December 2025 has been welcomed, but there are fears it could be confusing savers at a time when Cash ISA limits could also face reductions.

The FSCS, established in 2001, has paid compensation of £10.1 million to depositors in the past three full financial years, primarily in relation to small credit union failures. Since it was established, the FSCS has paid over £20 billion, primarily in relation to deposit failures during the 2008 financial crisis.