Estimate the FSCS protection gap
The brand name is not always the protection boundary
Some brands share a banking licence. FSCS tells users to add all accounts in the official checker because shared licences can affect the protected amount. Joint accounts normally apply the limit per eligible person, but several accounts under one shared licence are still aggregated before the limit is applied.
How the checker works
The checker multiplies the £120,000 deposit limit by the number of people on the account, one or two, and compares the result with the cash entered. Anything above that figure is shown as the potential excess. If the temporary high balance question is set to Possibly yes, the result adds a note that eligible life-event money can be protected up to £1.4 million per person, usually for six months.
Worked example with the default figures
The defaults are £150,000 held by one person under a single banking licence, with no temporary high balance. Estimated protection is £120,000, leaving £30,000 potentially unprotected. Change the account to a joint account for two people and the estimate becomes £240,000, so the same £150,000 shows no excess, because FSCS protects each eligible joint holder up to £120,000.
Now suppose the £150,000 came from selling a main home. That is a qualifying life event, so FSCS can protect a temporary high balance of up to £1.4 million for six months, starting when the money is first credited or becomes legally transferable. Moving the money to another account does not restart the six months, and the sale of a second home does not qualify.
What shares one limit
- The limit is per eligible person, per bank, building society or credit union, and brands that share one banking licence share one limit. FSCS gives HSBC and first direct as an example.
- Money held with an e-money institution or payment provider is not FSCS protected; those firms must safeguard customer funds instead.
- Investments have a separate FSCS limit of £85,000 per person, per firm, for firms that failed after 1 April 2019.
Limits of the result
- The checker cannot look up licences, so every account under the same licence has to be entered as one total.
- It does not test whether a depositor or an account is eligible; the official FSCS checker and the firm itself cover that.
- A temporary high balance claim needs evidence of the life event, such as property sale documents or probate papers.
Sources and useful links
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