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Home > Prudential Regulation Authority > Deposit protection limit – PS1/17

Deposit protection limit – PS1/17

16 January 2017


This Prudential Regulation Authority (PRA) policy statement (PS) provides feedback to responses to Consultation Paper (CP) 41/16 ‘Deposit protection limit’ (the ‘CP’). It also contains final rules (Appendix 1) and an updated Supervisory Statement (SS) 18/15 ‘Depositor and dormant account protection’ (Appendix 2).

This PS is relevant to:

  • UK banks, building societies, UK credit unions, as well as to overseas firms with PRA deposit-taking permission (hereinafter 'firms');
  • dormant account fund operators;
  • the Financial Services Compensation Scheme (FSCS), as the administrator of the UK's Deposit Guarantee Scheme (DGS) and Dormant Account Scheme (DAS); and
  • depositors.

In CP41/16 the PRA proposed to:

  • reset the deposit protection limit to protect depositors up to £85,000 as of 30 January 2017;
  • provide a five month transitional period for firms to amend disclosure, advertising materials and posters and stickers and to update the Single Customer View (SCV) to reflect the new deposit protection limit;
  • require firms to notify the PRA if they are ready to implement the rule changes prior to 30 June 2017; and
  • update SS18/15 with the PRA's expectations in relation to the above rule changes, correct references and delete expired text.
Feedback on consultation responses
The PRA has made some changes to the rules consulted on in CP41/16 in response to feedback (see Chapter 2). Material changes to the proposals include: allowing firms more flexibility to make changes to customer-facing materials as soon as practicable during the transitional period and removing the requirement that firms notify the PRA. The PRA considers that the changes made to the draft rules are not significant in terms of the impact on mutuals and are likely to reduce costs to firms. Chapter 2 sets out feedback to responses received to PRA proposals.
The new deposit protection limit is effective from 30 January 2017. Based on the final rules and expectations set out, firms:
  1. must make all changes to customer-facing materials required to implement the new deposit limit as soon as practicable after 30 January 2017 and in any event on or before 30 June 2017; and
  2. are expected to train their customer-facing staff to answer questions from customers about the change in the deposit limit, regardless of when a firm’s written materials are amended, by 30 January 2017 or as soon as practicable after 30 January 2017.
Policy statement