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Savings up to £35K given 100% protection - 1 Oct 07
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espresso
Posts: 16,448 Forumite
The Financial Service Compensation Scheme (FSCS) has been extended - from 100 per cent of the first £2,000 of savings and 90 per cent of the next £33,000 savings - to 100 per cent of all deposits under £35,000.
Not quite the £100k originally talked about!
Not quite the £100k originally talked about!
:doh: Blue text on this forum usually signifies hyperlinks, so click on them!..:wall:
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Comments
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still showing the old level of protection @14:30 hours on the fscs web site, expect they will catch up eventually............sanfly0
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What a ba***s up pity all the people who put thier savings back in NR cause they were told it was going to be £100,000 if theve got more than £35000, best take it out again DOH!!!!!0
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Totally pathetic, when it was rumoured to be 100K. However still highly unlikely any bank would collapse taking savers money with it though.0
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My understanding is that the chancellor was able to implement the full £35k protection immediately from today using existing powers, but further improvements under discussion will need legislation.,,,,,Not quite the £100k originally talked about!".....where it is corrupt, purge it....."0 -
Great care is needed.
eg,
One deposit with HBOS
One deposit with Halifax
One deposit with Birmingham Midshires
Such a saver is apparently only guaranteed to the total of £35k as they are all covered by one FSA agreement.
Look at the logos at the bottom of the web site on the following page:
http://www.hbos-choices.co.uk/
It's a HBOS web site. However, Bank of Scotland and Halifax are also connected.0 -
I'm delighted with the government's "climbdown". I'd say it was spot on. It's good to see that someone in the Treasury has their eye on the bigger picture.
The average saver (mean) in a building society has perhaps £8K. Average savings in this country were about £700 at one stage so the median average is much lower.
Why should the average saver be hit by worse rates (to pay for a vastly enhanced protection scheme) designed to protect those with large cash sums when a simple solution is available for those with £35K+ = open accounts with different institutions, invest in a variety of different assets (good practice anyway) or consult an IFA if they are clueless?
It may be that banks who have merged with others should be forced to write to their customers explaining the rules - IF the £35K limit applies to e.g. BoS/Halifax/Midshires accounts combined.
But please save us from misguided protection that will keep the poor, poorer
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Better regulation of the banking system is a better way to go.
MSE should support this reduced commitment as it is fit for purpose (i.e. it gives security to ?97%? of savers and should help stop future runs on banks / BSs ).0 -
The new rules guarantee the first £35,000 of your savings in full per financial institution. The scheme applies to cash ISAs as well as ordinary deposit accounts.
'Per financial institution' doesn't mean the same as ‘per account'. Be careful not to choose more than one subsidiary in a group as you'll only be covered once by the FSCS.
Eg, , the RBS group incorporates NatWest, Royal Bank of Scotland, Direct Line and Ulster Bank. The £35,000 maximum compensation limit will only apply once even if you hold a separate account with each company.
To obtain the highest level of protection don't hold more than £35,000 in one account.
Spread the default risk by choosing different accounts with a number of firms to maximise the protection. Keep an eye out for competitive interest rates. Don't sacrifice return for security.
Joint accounts holders are covered separately by the scheme and therefore could be eligible for maximum combined compensation of up to £70,000 per institution.
The new higher limits don't apply to any financial institution that defaulted before 1 October 2007.
The FSCS is your last port of call when you haven't been able to recoup your lost savings by any other means.0 -
Is there still only 4 million in the fund ?0
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As I understand it the chancellor has immediately raised the 100% protected level £35'000 from 01.10.2007. This is the most he can safeguard with immediate effect using the current legislation. He intends to raise the protected amount further (probably to 100 thousand) but unfortunately this requires new parliamentary legislation. As parliament are still on holiday and the legislative wheels turn very slowly this cant happen immediately. However I but would expect to hear details of new legislation in the next Queens speech.0
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