On 30 January 2017, the protection limit as provided by the Financial Services Compensation Scheme (FCSC) increased from £75,000 to £85,000.
The government backed scheme covers £85,000 per customer per authorised financial institution (e.g. bank, building society, etc).
If you have a joint account, the protection limit of £85,000 covers each customer separately.
Mark Neale, Chief Executive of the FSCS, commented on the rise: "Increasing our limit means we’ll protect more money and more people. Our new limit will protect about 98% of the UK public. So people can be sure their money in banks, building societies and credit unions is safe."
It's unlikely you will ever have to use this scheme but it is good to know it's there.
To find out more the FSCS, please visit their website.