Protection for money in banks and building societies to rise

The amount of a customer’s money protected if a UK bank or building society goes bust will rise to £120,000 next month, providing a boost to the nation’s savers.

- Rupert Jones

The new deposit protection limit, a 41% rise from the limit of £85,000 in place now, is higher than expected and takes effect on 1 December.

The original plan was that UK savers would have up to £110,000 of their deposits protected if their bank, building society or credit union went out of business. However, it appears this is one of the rare areas where consumers are benefiting from the fact that UK inflation - which stands at 3.8% - is higher than officials and the government would like it to be, at nearly double the 2% target.