What happens to your money if a UK bank fails or goes offline?

There are two different worries hiding in the question "is my money safe?". One is that a bank goes bust. The other is that it is still standing but you cannot reach your money because its systems have crashed. The protections for each are very different. This guide explains both, using the Bank of England, the FSCS and Parliament's Treasury Committee as sources, and then looks honestly at what physical gold does and does not add.

What happens to my money if a UK bank collapses?

The Financial Services Compensation Scheme, or FSCS, steps in. It is the UK's free, statutory safety net for customers of authorised financial firms. If a bank, building society or credit union authorised by the Prudential Regulation Authority fails, the FSCS repays eligible deposits up to the limit. You do not need to sign up or pay for it.

The limit rose from £85,000 to £120,000 per eligible person, per authorised firm on 1 December 2025. The Bank of England notes that the higher limit applies only to firms that fail from that date; earlier failures keep the old limit. The limit covers the total of your eligible deposits at that firm, not each account separately.

How are joint accounts covered?

The limit applies to each named person, not each account. The FSCS says two people with a joint account and no other accounts at that firm could each be covered up to £120,000, so £240,000 in total.

What about a large one-off sum, such as a house sale?

The FSCS can protect "temporary high balances" of up to £1.4 million for six months when they come from certain life events. These include selling or buying a home, an inheritance, redundancy pay, divorce settlements and insurance payouts. Payments linked to personal injury, disability or incapacity have no upper limit. You will need written evidence, and moving the money does not restart the six months.

How fast does the FSCS pay?

For deposits, the FSCS says it aims to pay within seven days of a bank, building society or credit union failing. More complex cases, such as temporary high balances or accounts with unusual ownership, take longer. Seven days without access to your main account is still a long time if you have no other way to pay, which is one reason the government's Be Ready campaign lists cash and cards on its emergency checklist.

Is the FSCS limit per bank or per brand?

Per authorised firm, sometimes called per banking licence. Several high street brands can sit under one licence and share one £120,000 limit. Two examples from official sources:

So £100,000 at Halifax plus £50,000 at Bank of Scotland is £150,000 at one firm, of which £120,000 is protected. Use the FSCS protection checker on fscs.org.uk before spreading savings.

What does the FSCS not cover?

• Investments use a different limit. If an FCA-authorised investment firm fails and cannot return your money or assets, the FSCS covers up to £85,000 per person, per firm. It never pays for investments that simply fall in value.
• Some money-like products are outside it. The FSCS lists cryptoassets, peer-to-peer lending, money on prepaid cards, savings clubs and scam investments from unauthorised firms as not covered.
• Physical gold is outside it. Gold bullion is generally not an FCA-regulated investment, so neither the FSCS nor the Financial Ombudsman covers it. Protection comes from how it is held, covered below.

What happens during a bank outage?

Your balance stays the same; your access does not. A bank's IT failure means the record of what it owes you is still there, but you may not be able to log in, pay by card, transfer money or take cash from a machine until the systems return.

These incidents are not rare. In March 2025 the Treasury Committee published figures from nine major banks and building societies showing at least 158 IT failure incidents and at least 803 hours (more than 33 days) of unplanned outages between January 2023 and February 2025.

The best known recent case is Barclays. From 31 January to 2 February 2025, a slowdown in its mainframe processing caused 56% of online payments to fail, according to the Committee. Barclays told MPs it expected to pay £5 million to £7.5 million in compensation for that outage, and up to £12.5 million including other incidents.

The lesson is practical. Outages usually last hours, sometimes a few days, and banks often pay compensation afterwards. But compensation does not buy groceries on a Saturday. A small stash of cash and a card from a second, unconnected bank cover most of the gap. Our guide to how much cash to keep at home works out a figure for three days.

What happens to your balance if a bank is hit by a cyber attack?

A cyber attack is a cause of disruption, not a change in what you own. Your deposit is money the bank owes you. That debt does not disappear because systems are locked or offline; the bank still owes it once they are restored.

Regulators expect banks to plan for this. Under the FCA's operational resilience rules, firms had until 31 March 2025 to show they could keep their "important business services" running within set "impact tolerances", the maximum disruption they can allow before customers or markets are seriously harmed. That is a planning rule, not a guarantee that nothing will go wrong.

If an attack were ever severe enough to make a bank fail, the FSCS would treat it like any other failure: the same £120,000 limit and the same seven-day aim. The official Be Ready advice, launched on 22 October 2026, does not mention cyber attacks, but its advice to keep cash and cards for three days of disruption fits the same risk.

What can you do to protect your money?

1. Keep each pot under the limit at each firm. If you hold more than £120,000 (or £240,000 jointly), spread it across separately authorised firms, checking which brands share a licence.
2. Have a second bank card. An account and debit card with a different banking group means one outage does not stop all your payments.
3. Keep some cash at home. The government's checklist includes a mix of coins and notes. See our UK emergency kit checklist for the full list.
4. Keep records. Save statements and app screenshots now and then, so you can show what you held if anything is disputed.
5. Know what is outside the FSCS. Crypto, prepaid cards and physical gold are not covered, so the way you hold them matters.

Where does physical gold fit in?

Gold answers a different question. A bank deposit is a promise: the bank owes you money, and the FSCS backs that promise up to a limit. Physical gold is not a promise. If you own a coin or an allocated bar, it is your property, and its existence does not depend on any bank staying solvent or online.

That has real limits. Gold has no FSCS protection and no guaranteed value: its price moves every day and can fall sharply. You cannot spend it in a shop during an outage. Selling it needs a dealer and a working payment system. And if you keep it at home, it carries the same theft, fire and insurance problems as cash. Our guide to gold as a safe haven looks at how it has behaved in past crises.

What happens to vaulted gold if the provider fails?

It depends on whether the gold is allocated (specific bars held in your name) or unallocated (a claim on the provider for an amount of metal). Allocated metal remains your property and should not appear on the provider's balance sheet, so its creditors have no claim on it. BullionVault, for example, says clients' bullion has never been on its operating company's balance sheet and that a liquidator would return it in full. Unallocated gold is closer to a bank deposit, without the FSCS. Our explainer on allocated vs unallocated gold covers the difference, and our BullionVault review looks at that provider in detail.

Vault fees vary widely. Our UK gold storage guide compares home safes, bank boxes and vaults with prices.

If you decide vault storage suits you, two UK options offer allocated storage. Both are listed for information, not as a recommendation.

Visit BullionVault Visit The Royal Mint

For more on buying, storing and the tax rules on gold in Britain, start at our UK gold hub.

This guide is general information, not financial advice. FSCS limits and rules can change; check fscs.org.uk for the current position before making decisions.

Not financial advice. GoldVetted provides general information to help you compare options. It is not personal financial, tax or legal advice. Gold prices go down as well as up, and you may get back less than you pay. Check tax rules with the official source or a qualified adviser before you act.