The FSCS deposit protection limit rises to £120k, UK inflation slows, and details of the Renters’ Rights Act are shared
Good news for savers as the FSCS deposit protection limit is set to rise to £120,000 from December, the UK’s inflation rate slows slightly, and further details of the Renters’ Rights Act are shared
FSCS Deposit Protection Limit to Rise to £120,000 from December
The Prudential Regulation Authority (PRA) has confirmed that the Financial Services Compensation Scheme (FSCS) deposit protection limit will increase from £85,000 to £120,000 from the start of December.
The new threshold applies per depositor, per PRA-authorised bank, building society or credit union. The PRA have confirmed that HM Treasury has approved the change.
This is the first change to the limit since 2017 and follows a consultation earlier in the year. The PRA had initially proposed that the limit should rise to £110,000, but feedback provided in the consultation and the latest inflation data prompted a higher final figure.
Temporary High Balances Limit Also Rising
Alongside the core protection limit, the cap for Temporary High Balances (THBs) will increase from £1 million to £1.4 million on 1 December.
THB protection applies to qualifying life events that can temporarily increase a customer’s account balance, such as buying or selling a house or insurance claim payouts.
Implications for Your Business
The increase in limit will be good news if you hold cash reserves in your business to cover working capital, payroll and other running costs.
It is worth noting that the limit continues to be applied ‘per depositor, per PRA-authorised institution’. This means that if you are eligible and hold cash reserves that exceed the deposit protection limit, you could gain further protection by spreading your funds across different authorised institutions.
It is worth checking whether a banking group is operating multiple brands under a single licence. This means you would only receive a single protection limit for the total amounts held across those brands.
Taking a Wider Look at Cash
For many owner-managed businesses, cash reserves naturally rise and fall throughout the year. If you find that your balances regularly build up beyond what the business needs for day-to-day operations, the increase in the FSCS limit could be a useful prompt to review how much cash the business actually needs to hold.
Spreading funds between different banks can increase the level of protection available, but it can also be sensible to take a step back and consider whether those reserves are serving a useful purpose in the business. A simple cash flow review can help identify the amount needed for routine expenses, tax payments and any planned spending over the coming months.
Where cash consistently exceeds this level, you may want to consider:
- Are there investment opportunities for the business that would fit with your business growth plans?
- Would withdrawing funds, such as by dividends, better help you achieve your personal goals?
The right choice for you will depend on your personal and business circumstances, tax considerations and your plans for the business.
If you would like tailored advice or simply assistance in clarifying what level of reserves your business needs, please get in touch. We would be happy to help you!
UK Inflation Slows to 3.6% as Energy and Hotel Costs Ease
UK inflation eased to 3.6% in the year to October, down from 3.8% in September, according to the latest figures from the Office for National Statistics (ONS).
Although still above the Bank of England’s 2% target, this is the slowest pace of price rises for four months and comes just before the Chancellor delivers the Autumn Budget.
What is Driving the Latest Change?
The ONS highlighted smaller increases in household energy bills as a key reason for the slowdown. Ofgem raised the energy price cap in October, but the 2% rise was far lower than the 9.6% increase applied this time last year. Hotel prices, which often fall between summer and winter, also dipped more sharply than they did last year.
However, not all categories moved in the right direction. Food inflation rose to 4.9%, from 4.5% in September. Prices increased for items such as bread, meat, fish, vegetables, chocolate and confectionery, although fruit prices fell slightly.
The Food and Drink Federation said the pressures were linked to ingredient and energy costs as well as regulatory requirements, such as packaging taxes and rising National Insurance.
Position Ahead of the Budget
Chancellor Rachel Reeves responded to the figures by saying that one of the main goals of the Budget is to ease cost-of-living pressures. What this will mean in terms of concrete measures we must wait to see.
Prospects for Interest Rates
Although inflation remains above target, the latest figures strengthen expectations of a cut to the Bank of England base rate. Some economists believe this could happen at the next meeting of the Monetary Policy Committee on 18 December 2025.
What This Means for Your Business
Reducing inflation is good news for the economy and increases confidence. You may find your customers becoming more willing to commit to spending again.
If you have clients who have paused projects, re-engaging with them could encourage them to restart work.
At the same time, cost pressures have not disappeared. The ONS reported that the annual cost of raw materials for businesses has continued to increase. So, keeping an eye on your costs and ways that you can control or reduce them is still key to remaining profitable.
If you would like to discuss how the latest inflation figures or the Autumn Budget may affect your business, please get in touch. We are here to help!
Renters’ Rights Act: Three-stage implementation plan announced
The government has confirmed how the new Renters’ Rights Act will be phased in, setting out a three-phase approach that runs from May 2026 through to the end of the decade.
Phase 1: Initial reforms from 1 May 2026
The first and most immediate changes will take effect on 1 May 2026. These include the end of Section 21 “no-fault” evictions, meaning landlords will no longer be able to evict tenants without giving a valid reason.
At the same time, if landlords need to get their property back, they will have stronger, legally valid reasons to do so. These include moving in, selling the property, dealing with serious rent arrears or tackling anti-social behaviour.
Tenants will gain other new protections, including the ability to challenge above-market rent increases intended to encourage them to leave. Landlords will also no longer be able to unreasonably refuse requests for pets.
From 1 May 2026, it will become illegal to:
- Increase rent more than once a year.
- Request more than one month’s rent in advance.
- Run rental bidding wars between prospective tenants.
- Discriminate against tenants because they receive benefits or have children.
Councils will be overseeing these new rights. Fines can reach up to £7,000 for breaches, increasing up to £40,000 for repeat or serious offences. Tenants and local authorities will also be able to seek rent repayment orders.
Guidance for landlords and letting agents will be published ahead of these changes, with councils receiving additional funding to help them prepare.
Phase 2: Ombudsman and database
The second phase, beginning in late 2026, focuses on improving oversight and resolving disputes in the private rented sector.
A new Private Landlord Ombudsman will be introduced, offering tenants a free, independent service to help them resolve complaints that have not been addressed by their landlord. This is intended to reduce the need for court action and deliver faster outcomes.
A Private Rented Sector Database will also be launched, requiring all landlords to register themselves and their rented properties. The database will be rolled out in stages across England.
Phase 3: Further quality and safety standards to follow
The final phase will introduce measures aimed at ensuring safe conditions in private rented homes, including the introduction of a Decent Homes Standard. The government also plans to consult on extending Awaab’s Law to private renting.
The government has already consulted on plans to require that all domestic privately rented properties in England and Wales meet an EPC rating of C or equivalent by 2030, unless an exemption applies. Further details on this will be set out when the government responds to the consultation.
See: https://www.gov.uk/government/news/no-fault-evictions-to-end-by-may-next-year
Will Your Business Qualify for the New RHL Multipliers?
Legislation has been passed by Parliament that defines which properties are eligible for the new Retail, Hospitality and Leisure (RHL) business rates multipliers which come into force on 1 April 2026. HM Treasury has also provided guidance to local authorities on how to apply these regulations.
Earlier in the year, the Non-Domestic Rating (Multipliers and Private Schools) Act 2025 laid the legal basis for introducing higher multipliers for the properties of large businesses and lower multipliers for RHL properties. The intention is to help high street RHL businesses that sell to in-person customers.
From April 2026, two lower business rates multipliers for RHL properties will be introduced for rateable values below £500,000.
- A small business RHL multiplier will apply where the rateable value is below £51,000.
- A standard RHL multiplier will apply where the rateable value is between £51,000 and £499,999.
The rates for these multipliers will be confirmed during Budget 2025, which is being held on 26 November 2025.
In a change from the RHL business rates relief that is currently in place, it is intended that there will be no cash cap. This means the RHL multipliers will apply to any property that meets the statutory definition of a RHL property contained in the new regulations.
Broadly speaking, the new definitions will mean that most properties receiving the 40% RHL relief in 2025-26 will qualify for the proposed lower multipliers. However, local authorities have had discretion in how they have awarded the 40% RHL relief, whereas the new RHL multipliers will only apply where the legal definition is met. This may mean that some properties currently receiving relief could fall outside the new relief measures.
To see whether your RHL business property will qualify for the new RHL multipliers, it is worth reviewing HM Treasury’s guidance.