From January 1, the Financial Services Compensation Scheme will protect savings of £75,000 (or £150,000 held in a joint account) should the bank or building society go bust. The limit is falling from £85,000.
Those with savings over the new limit must split or move funds by December 31 to ensure that the full amount is protected.
Holders of fixed-term accounts have until this date to contact providers to make a penalty-free withdrawal of up to £10,000.
Savers should be aware of brands that share the same licence – for example, HSBC and First Direct – as the FSCS limit applies per licence. Only £75,000 will be protected across both brands.