**Boosting Your Safety Net: UK Plans to Increase Savings Protection to £110,000!**

A proposed change in UK banking regulations aims to significantly increase the amount of savers’ money protected when a bank or building society goes bankrupt. The Prudential Regulation Authority (PRA) announced that the current limit of £85,000 will rise to £110,000, adjusting for inflation since the last adjustment in 2017. The new limit, if approved after a consultation process, will take effect on December 1, 2025.

Independent financial adviser Rob Mansfield welcomed this increase, noting that it is great news for savers as it enhances confidence in the banking system. Presently, each person is protected up to £85,000 per banking institution, which means a joint account could have a protection cap of £170,000. Savers with amounts exceeding this are advised to distribute their funds across multiple banks to ensure coverage by the Financial Services Compensation Scheme (FSCS). Over its 25 years, the FSCS has compensated depositors with over £20 billion primarily due to issues stemming from the 2008 financial crisis.

Additionally, the review may increase the limit on temporary high balance claims from £1 million to £1.4 million, applicable to customers with substantial amounts due to receiving large payouts or during property transactions. Sam Woods, chief executive of the PRA, emphasized that enhancing customer confidence in the banking sector is crucial for economic growth. Regulatory pressures from the government aim to align consumer protections with economic development, as highlighted by Rocio Concha from the consumer advocacy group Which?, who considered the adjustment a sensible move. In summary, this adjustment signifies a proactive step towards ensuring that consumer protections evolve in alignment with economic needs, providing a more secure banking environment for UK savers.