Consumer rights expert Martyn James and consumer finance specialist at Royal London, Sarah Pennells, round up what you need to know about keeping your savings safe
It’s 2026 and the world is a volatile place. Prices of gold and silver – traditionally where wealthy people invest their money in trying times – are hitting record levels.
The stock market is shooting up and down with every big news story in the world and some of our most beloved brands have gone bust.
At times like this, it makes sense to not only make the most out of your savings, but to make sure that your precious cash is protected in case things go wrong. I’ve got good news for you though on that front!
Not only do you have lots of options for making your savings work for you, we have some exceptionally strong regulations around savings protections in the UK. But it pays to know how they work and their limitations.
So for the column this week, I’ve teamed up with Sarah Pennells, my fellow TV money expert and consumer finance specialist at mutual pensions and investment provider Royal London, to give you all the information you need.
Sarah’s guide to savings and protection
At first sight, the rules on how your savings are protected may seem straightforward, but dig a little deeper and you’ll find rules and clauses that could catch you out, especially if you have a serious amount in savings.
If you’re building up a few thousand pounds for a rainy day in a bank or building society account, then the Financial Services Compensation Scheme’s (FSCS) saving safety net should protect you. That means you won’t lose out financially if the bank or building society goes bust.
Where it gets a bit more complicated is if you’re building up a lot of savings, or if, for example, you have a cash balance on things like gift cards or you’ve been saving through a Christmas savings scheme.
Under the current rules, you can have up to £120,000 saved with an individual bank or building society and you should be covered by the FSCS. That’s a recent increase from the old £85,000 limit.
Be aware that some e-financial institutions are not FSCS covered. You can check whether your account is covered using the savings protection checker on the FSCS website.
The money doesn’t have to be in a savings account specifically to be protected. It could, for example, be in your current account instead (although you probably won’t earn much interest that way!) If you have a joint account, that limit is £240,000 between you.
If you have more than the £120,000 limit, then it’s a good idea to spread your savings between different banks or building societies so all your savings are protected.
But, and it’s an important ‘but’, the ‘per bank’ limit doesn’t necessarily apply to individual banks or building societies as some are part of the same group.
Confusingly, two banks may be part of the same group and share a banking licence, and therefore only £120,000 of savings would be protected, per person, between these two banks.
Meanwhile, two other banks that are also part of the same group could have separate banking licences. In this case, savings you have with each bank would be protected up to a limit of £120,000 (so, £240,000 in all).
If you have over £120,000 in savings with different organisations it’s worth checking if and how they’re linked – again, using the FSCS’ protection checker.
There is special provision to protect savings of up to £1.4 million, if you’ve, for example, sold your house and have put the money into a savings account while you work out your next move. It would also apply if you’ve inherited a lot of money. This higher limit only applies for up to six months from when you first deposit the money in the bank or building society.
As well as bank and building society personal current or savings accounts the savings compensation scheme covers money you have in, for example, a Cash ISA or if you run a small business and have a savings account.
You’re also covered if you save through a credit union. However, you’re not covered by the FSCS if you have money in NS&I, such as Premium Bonds. That’s because your money is 100% guaranteed by the UK government, no matter how much you have squirreled away.
Martyn’s guide to savings accounts
It makes sense to cast your net a bit wider than you might ordinarily be used to when looking for the best savings rates. That’s because most (but not all) of the main high street banks don’t have the most competitive of offers.
However, you’ll need to familiarise yourself with the way savings accounts work to get the deal that works best for you and your cash. That’s because you’ll be offered different rates for standard accounts, (easy access) savings accounts, notice accounts and special offers too.
The golden rule when it comes to savings rates is the longer you are willing to ‘lock your money away’ the better the rates. However, savings rates are pretty fantastic compared to the last decade at the moment, so there are good deals aplenty!
Different types of savings accounts
- Bank accounts: A standard bank account pays the worst rate of interest. It can also be very hard to work out what you might be saving each month because of the volume of transactions going through your account each week. However, there are some accounts out there that do offer better interest deals, or even cashback under certain circumstances. If you’re thinking about switching bank accounts look for one that works harder for you.
- Easy-access savings accounts: If you don’t want to tie up your cash for a long or even short period of time then have a look at ‘easy access’ savings accounts. These offer relatively good rates of interest and you can make withdrawals. But as with everything, there are caveats. Make sure you understand when the interest is credited to your account. Many accounts also have rules around the number of withdrawals you can make each year without losing the interest. On the plus side, if you do have an emergency, you can abandon the interest and get your hands on your cash. Watch out for ‘introductory rates’ designed to lure you in. Pop the date in your diary when the good interest period ends as you’ll find the account reverts to a poorer rate automatically after.
- Fixed-rate accounts: A fixed rate account will allow you to ‘lock in’ your cash to get a better rate of interest. These fall in to two main categories. Short term (7 to 30 days) and longer term (a year to 5 years or more). A word of warning. Many of these fixed rate accounts literally lock your cash in for that whole period so you can’t access it. Some might allow you to get your cash in some circumstances. However, expect big fees or significant or total loss of interest if you do. You’ll get the best rates here, but you might want to consider only locking away a certain amount of your savings for this.
- Notice accounts: A bit like a ‘lighter’ version of a fixed rate deal, a notice account will let you get your hands on your cash after a pre-set ‘notice’ period has elapsed. The higher that notice period, the better the rate of interest. But do be aware that your money will be locked in for the notice period and it’s still tricky to access the money in emergencies.
- Individual Savings Accounts (ISA): ISAs are basically a tax-free way to save. Though investment options are available the cash ISA is worth considering if you want to take advantage of these products and their tax benefits. You can put up to £20,000 in each cash ISA every year. As with savings accounts, you can get easy access and fixed deals. You can take out a new ISA each year but you can keep your cash in your existing ISAs ‘rolling over’ so if you have £20,000 plus yearly interest, this is ‘compounded’ next year – you then get interest on the total savings plus interest the next year. So your savings grow and grow.
Catches and caveats
Some of the bigger lenders have some deals that look great on paper, but when you go in to the detail, they are less than impressive. The main catches to watch out for are:
- Loyalty deals: These are better rates… but ones only available to existing customers of the bank or building society.
- New customer rates: As above but in reverse. You may need to open a bank account and have money paid in to it alongside the savings account.
- Minimum payments: Some accounts require you to have a minimum amount of money paid in to the account each month, or even your wages.
- Limited withdrawals: Even though some accounts are billed as ‘easy access’ savings accounts, you may find that you are limited to only a small number of withdrawals each year.
- Bonus rates: Watch out for these. A bonus rate looks good on paper but that rate will change after a set period, which means the interest you are paid will drop significantly.
- Variable rates: As the name on the box says, these rates will go up and down over time. We’re expecting the BoE base rate to drop later this year, so these rates will go down.
If you want to go for easy access savings then some of the new online only, ‘challenger’ banks have some good deals, though nothing earth-shaking. The best rates I can find at the moment go up to 4.5% for easy access accounts.
Bear in mind though that some of these deals are ‘introductory’ offers for new customers or rates drop after a year. So note down in your diary when the deals end.
If you are prepared to save some of your money and leave it untouched for a while, then notice or fixed rate accounts are the way to go.
There’s a huge range of rates out there, depending on how long you are willing to lock in your cash, but above all else, find out what happens if you do need to access your cash in an emergency.
Complaints
Banks based in the UK must be regulated by the Financial Conduct Authority (FCA), which means you can go to the Financial Ombudsman Service (FOS) if things go wrong.
Always check that you are dealing with the correct bank when you transfer your money over too. There are lots of crafty fraudsters out there so be sure you’re on the right website and never click on unsolicited links sent to you.
- Martyn James is a leading consumer rights campaigner, TV and radio broadcaster and journalist
- Sarah Pennells is the consumer finance specialist at mutual pensions and investment provider Royal London
