Main site > MoneySavingExpert.com Forums > Essential Money > Savings & Investments > Are your savings safe? article discussion (Page 1)

IMPORTANT! This is MoneySavingExpert's open forum - anyone can post

Please exercise caution & report any spam, illegal, offensive, racist, libellous post to forumteam@moneysavingexpert.com

  • Be nice to all MoneySavers
  • All the best tips go in the MoneySavingExpert weekly email

    Plus all the new guides, deals & loopholes

  • No spam/referral links
or Login with Facebook
Are your savings safe? article discussion
Reply
Views: 124,465
Thread Tools Search this Thread Display Modes
# 1
Former MSE Dan
Old 18-03-2008, 4:26 PM
Former Web Editor
Serious MoneySaving Fan
 
Join Date: Dec 2004
Posts: 1,582
Default Are your savings safe? article discussion

This discussion relates to the fully updated


Please click reply to discuss


Former MSE Dan is offline
Reply With Quote Report Post
# 2
ps646566
Old 18-03-2008, 5:01 PM
MoneySaving Convert
 
Join Date: Mar 2007
Location: Home Counties East
Posts: 69
Default

I would argue that, regardless of the FSCS, savings with UK based institutions are inherently safer. As Northern Rock showed, HMG cannot afford a UK institution of any size and significance to go under because the political, financial, and economic ramifications are just too awful for it to contemplate. If however a bank in, for example, Iceland, India, or Nigeria were to fail then the situation is much less clear cut for the British investor. It could take a very long time and involve a great deal of time, effort, and stress to recover all money invested up to £35,000.
I blame Blair
ps646566 is offline
Reply With Quote Report Post
# 3
1echidna
Old 18-03-2008, 6:37 PM
PPR
Deliciously Dedicated Diehard MoneySaving Devotee
 
Join Date: Mar 2008
Location: out of the blue
Posts: 20,838
Default

Quote:
Originally Posted by ps646566 View Post
I would argue that, regardless of the FSCS, savings with UK based institutions are inherently safer. As Northern Rock showed, HMG cannot afford a UK institution of any size and significance to go under because the political, financial, and economic ramifications are just too awful for it to contemplate. If however a bank in, for example, Iceland, India, or Nigeria were to fail then the situation is much less clear cut for the British investor. It could take a very long time and involve a great deal of time, effort, and stress to recover all money invested up to 35,000.
I can understand the time (and my situation is that I can afford to wait for the machinations of the FSCS) but why effort or stress? The FCCS surely does not expect the individual investor to assist in recovering monies available in the event of failure by a foreign bank operating under the scheme?
1echidna is offline
Reply With Quote Report Post
# 4
bryanb
Old 18-03-2008, 6:52 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Dec 2007
Location: Positive equity
Posts: 4,501
Default

Is Hong Kong & Shanghai Banking Corp a UK institution?
This is an open forum, anyone can post and I just did !
bryanb is offline
Reply With Quote Report Post
# 5
rosy
Old 18-03-2008, 7:11 PM
MoneySaving Stalwart
 
Join Date: Oct 2005
Posts: 620
Default

Can I ask -hoping it's a theoretical question - if a British bank did have to be bailed out by the government and be nationalised, would you retain all of your savings in it or would you lose everything over the protected 35000?
rosy is offline
Reply With Quote Report Post
# 6
Stavros
Old 18-03-2008, 7:25 PM
Serious MoneySaving Fan
 
Join Date: Aug 2007
Posts: 1,257
Default

The FSA would gaurantee the first 35k, 'technically' speaking after that its a gonner. BUT. I doubt that this government would allow a UK bank to go under and seeing scenes of thousands of customers queuing outside banks again like we saw with the panic caused over the Northern Rock, I would expect the Chancellor (after changing his crap stained underpants) to re-assure customers that their savings are safe
Liquidity is when you look at your investment portfolio and **** your pants
Stavros is offline
Reply With Quote Report Post
The Following User Says Thank You to Stavros For This Useful Post: Show me >>
# 7
Aegis
Old 18-03-2008, 8:18 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Jun 2007
Location: London
Posts: 4,571
Default

Quote:
Originally Posted by bryanb View Post
Is Hong Kong & Shanghai Banking Corp a UK institution?
Vaguely, yes

It's quoted on the UK stock market anyway (among others!)
I am an Independent Financial Adviser
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
Aegis is online now
Reply With Quote Report Post
# 8
awadan
Old 18-03-2008, 9:26 PM
MoneySaving Newbie
 
Join Date: Aug 2007
Posts: 3
Default What about building societies?

OK I understand the rules for the FSCS for banks but does this also work for building societies?
:confused:
awadan is offline
Reply With Quote Report Post
# 9
Aegis
Old 18-03-2008, 9:36 PM
Fantastically Fervent MoneySaving Super Fan
 
Join Date: Jun 2007
Location: London
Posts: 4,571
Default

Yup, same scheme, same terms.
I am an Independent Financial Adviser
Anything I say on the forum is for discussion purposes only and should not be construed as personal financial advice. It is vitally important to do your own research before acting on information gathered from any users on this forum.
Aegis is online now
Reply With Quote Report Post
# 10
Exo
Old 18-03-2008, 10:07 PM
MoneySaving Convert
 
Join Date: Mar 2008
Posts: 149
Default

Quote:
Originally Posted by ps646566 View Post
I would argue that, regardless of the FSCS, savings with UK based institutions are inherently safer. As Northern Rock showed, HMG cannot afford a UK institution of any size and significance to go under because the political, financial, and economic ramifications are just too awful for it to contemplate. If however a bank in, for example, Iceland, India, or Nigeria were to fail then the situation is much less clear cut for the British investor. It could take a very long time and involve a great deal of time, effort, and stress to recover all money invested up to 35,000.
I do not follow your logic that investing in British banks is safer than foriegn ones, assuming of course the foriegn banks conform to the FSCS.
It could be argued that the economies in China and India are far stronger than the UK, so ICICI looks a safer bet in comparison to Alliance and Leicester.

If a bank did go under, then the saver may have a wait to recover his/her money via the FSCS, regardless of the location of the bank in question.

From your other posts on this forum, you seem to be averse to investing outside the UK.
Without competition from foriegn banks, do you think those in the UK would still be competing at the same level of 6% - 6.5% for savers?

I think the USA and British banks have been quite reckless with their investments/risks. They seem to be meeting target levels in order to sustain their high bonus payouts. Common sense and risk assessment seemed to be well down their check list. They seemed to be totally removed from the real world and their glass bubble has finally broken.

Last edited by Exo; 18-03-2008 at 10:17 PM.
Exo is offline
Reply With Quote Report Post
# 11
Meltdown
Old 18-03-2008, 11:12 PM
MoneySaving Stalwart
 
Join Date: Dec 2007
Posts: 462
Default

Quote:
Originally Posted by rosy View Post
Can I ask -hoping it's a theoretical question - if a British bank did have to be bailed out by the government and be nationalised, would you retain all of your savings in it or would you lose everything over the protected 35000?
Clearly not theoretical (nor hypothetical).
Northern Rock was a British bank, bailed out by the government, and then nationalised. Depositors with NR have retained all their savings, and received a bonus to their interest rate for staying put.

It's when a bank goes completely bust (bankrupt), and isn't taken over lock stock and barrel, that the compensation scheme will kick in.
Meltdown is offline
Reply With Quote Report Post
The Following User Says Thank You to Meltdown For This Useful Post: Show me >>
# 12
Meltdown
Old 18-03-2008, 11:18 PM
MoneySaving Stalwart
 
Join Date: Dec 2007
Posts: 462
Default

Quote:
Originally Posted by Stavros View Post
I would expect the Chancellor (after changing his crap stained underpants) to re-assure customers that their savings are safe
Just a thought ...
Does anyone know what Messers (yes, that's the correct spelling ) Brown and Darling do about their savings. Clearly Brown is unlikely to keep Gold ...
Meltdown is offline
Reply With Quote Report Post
The Following User Says Thank You to Meltdown For This Useful Post: Show me >>
# 13
ianmr65
Old 18-03-2008, 11:19 PM
MoneySaving Stalwart
 
Join Date: Mar 2008
Posts: 585
Default

1) There is pretty much no such thing as a 'british' bank anymore - This is not 1950. All the major high street names, have share capital spread all over the place. are run by americans, and are active in dozens if not hundreds of countries, and depend on global markets for their financing. They are international banks who are headquarteted in the UK

The are as British, as Ford, or Shell, or Macdonalds.

2) The british governement is no more capable of nationalising Barclays or HSBC, or any bank other that A&L or B&B than I am.
Even HBOS, which is small by comparison, still has an asset/liability base of 650bn a market cap of 20bn , and they print bank notes which are legal tender!!! would be too big to nationalise.

So say hbos goes down, you honestly belive the goverment, can cover a liabillity base that is a quarter of the UKs GDP.


3) Northern rock was a one off. A provincial little bank, with ideas above it's station, who played in the big boy's playground and got burnt.

4) The FCSC scheme aims to pay out within 6 months, but if they sums required exceed 4BN, it reserves the right to call on the goverement to make a desicion, about compensation.

So what's riskier, a huge bank, which if it goes down... the goverment / world are impotent to do anything about it, the bigger they are the harder they fall. Too much for the fcsa to pay out on. Mass panic.

Or a small bank covered by two schemes one in the uk, and one in the HQ country. With a smaller asset base. That can easily be managed / or taken over by a larger rival, or nationlised.

You pay your money, you take your choice.
ianmr65 is offline
Reply With Quote Report Post
# 14
ianmr65
Old 18-03-2008, 11:22 PM
MoneySaving Stalwart
 
Join Date: Mar 2008
Posts: 585
Default

Quote:
Originally Posted by Meltdown View Post
Just a thought ...
Does anyone know what Messers (yes, that's the correct spelling ) Brown and Darling do about their savings. Clearly Brown is unlikely to keep Gold ...

Allister darling has or had a Northern Rock Mortgage , which may help shed some light.
ianmr65 is offline
Reply With Quote Report Post
The Following User Says Thank You to ianmr65 For This Useful Post: Show me >>
# 15
Meltdown
Old 18-03-2008, 11:25 PM
MoneySaving Stalwart
 
Join Date: Dec 2007
Posts: 462
Wink

Quote:
from the MSE article ...
Q. Will my bank/building society will go bust?
A. In the first incarnation of this article, in September 2007, my answer was "extraordinarily, unthinkably, ridiculously unlikely", now I believe it is "unlikely".
Didn't that original article include something along the lines of :
"It is as unthinkable as Cardiff City winning the F.A. Cup" ... or something like that.

Last edited by Meltdown; 18-03-2008 at 11:36 PM. Reason: Yes, I know it was Accrington Stanley, but hey ...
Meltdown is offline
Reply With Quote Report Post
The Following User Says Thank You to Meltdown For This Useful Post: Show me >>
# 16
1echidna
Old 18-03-2008, 11:26 PM
PPR
Deliciously Dedicated Diehard MoneySaving Devotee
 
Join Date: Mar 2008
Location: out of the blue
Posts: 20,838
Default

Re Ianmr65

Could any government actually admit that it was impotent though? Surely not in the nature of governments especially British ones to admit impotence? Wouldn't they just print money?

Last edited by 1echidna; 18-03-2008 at 11:28 PM.
1echidna is offline
Reply With Quote Report Post
# 17
ianmr65
Old 18-03-2008, 11:34 PM
MoneySaving Stalwart
 
Join Date: Mar 2008
Posts: 585
Default

Quote:
Originally Posted by 1echidna View Post
Re Ianmr65

Could any government actually admit that it was impotent though? Surely not in the nature of governments especially British ones to admit impotence? Wouldn't they just print money?
That's what the US fed is doing right now. Printing money to stave off recession, and it only just, just managed to pull off deal for it's fifth biggest investment bank.

In the case of the UK they'd spin it and would ceratinly not admit that they were too impotent, but they could never do it. And Certainly in the case of HSBC, Barclays, and Lloyds, and RBS would not be allowed to by the Fed and the ECB.
ianmr65 is offline
Reply With Quote Report Post
The Following User Says Thank You to ianmr65 For This Useful Post: Show me >>
# 18
jamesd
Old 19-03-2008, 1:31 AM
Deliciously Dedicated Diehard MoneySaving Devotee
 
Join Date: May 2006
Posts: 15,336
Default

This is misleading because it is in a section writing about the FSCS: "if you put money in stocks and shares, funds that invest in them, and pension funds, then you’ve got a “risk based” investment NOT savings, and this protection doesn't apply".

The FSCS does protect investments. While it's true that the 35,000 savings part of FSCS doesn't apply to investments, the investment protection limit is 100% of the first 30,000 plus 90% of the next 20,000. The trustee arrangement in pensions and unit trusts and OEICs gives an additional layer of protection from problems with fund managers, since the trustee is holding the assets in your name, not the name of the fund manager.

Instead of writing this in a section about the FSCS it would perhaps be clearer to put it before that, saying that the article is not writing about the FSCS and other protections that may apply to investments.

The following headings need English correction "Will my bank/building society will go bust?" and "How do I ensure get 100% safety?".

Last edited by jamesd; 19-03-2008 at 9:36 PM. Reason: corrected FSCS protection limit for investments
jamesd is offline
Reply With Quote Report Post
# 19
ps646566
Old 19-03-2008, 7:27 AM
MoneySaving Convert
 
Join Date: Mar 2007
Location: Home Counties East
Posts: 69
Default

Quote:
Originally Posted by 1echidna View Post
I can understand the time (and my situation is that I can afford to wait for the machinations of the FSCS) but why effort or stress? The FCCS surely does not expect the individual investor to assist in recovering monies available in the event of failure by a foreign bank operating under the scheme?
It's never been put to the test has it. I can just foresee all sorts of obstacles in a situation where HMG has no vested interest in keeping the lid on things. For my part the difference in interest rates is not worth the risk in today's climate. Other people obviously think differently. Each to their own.
I blame Blair
ps646566 is offline
Reply With Quote Report Post
# 20
murphydavid
Old 19-03-2008, 8:19 AM
MoneySaving Stalwart
 
Join Date: Dec 2003
Posts: 485
Default Domino

Why really did the government bail out Northern Rock? They fear the domino effect. It is almost certain that if one bank is allowed to fall then there will be a mad panic to withdraw money from a lot of banks. They would almost certainly fail. The FSCS would be overwhelmed. This way leads to madness!
murphydavid is offline
Reply With Quote Report Post
Reply

Bookmarks
 
 




Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off

 Forum Jump  

Contact Us - MoneySavingExpert.com - Archive - Privacy Statement - Top

Powered by vBulletin® Copyright ©2000 - 2014, Jelsoft Enterprises Ltd.

All times are GMT +1. The time now is 9:59 PM.

 Forum Jump  

Free MoneySaving Email

Top deals: Week of 30 July 2014

Get all this & more in MoneySavingExpert's weekly email full of guides, vouchers and Deals

GET THIS FREE WEEKLY EMAIL Full of deals, guides & it's spam free

Latest News & Blogs

Martin's Twitter Feed

profile

Cheap Travel Money

Find the best online rate for holiday cash with MSE's TravelMoneyMax.

Find the best online rate for your holiday cash with MoneySavingExpert's TravelMoneyMax.

TuneChecker Top Albums

  • VARIOUS ARTISTSNOW THAT'S WHAT I CALL MUSIC! 88
  • ED SHEERANX (DELUXE EDITION)
  • VARIOUS ARTISTSTHE HOUSE THAT GARAGE BUILT - MINISTRY OF SOUND

MSE's Twitter Feed

profile
Always remember anyone can post on the MSE forums, so it can be very different from our opinion.
We use Skimlinks and other affiliated links in some of our boards, for some of our users.