Are your savings safe? article discussion

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  • colsten
    colsten Posts: 17,597
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    The article does not appear to address the question of how much protection is offered to accounts that were opened BEFORE the limit was changed but where the provider went bust AFTER the limit changed. Customers with, for example, fixed rate bonds cannot simply transfer out of their existing provider to ensure that they stay under the limit. If they took out an account with the certainty that £85k would be protected but now find that only £75k is protected, they would feel like they had been robbed by the government if the worse happened. (Makes a change I suppose.)
    RF
    The change only applies from January 2016 onwards. How existing fixed term accounts with more than £75K will be handled is still subject to consultation with the financial services industry. Nobody will get robbed.
  • It would seem that some providers are allowing a one-off withdrawal without penalty on restricted access accounts in order to let the customer reduce their holding to less than £75k.
    RF
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  • colsten
    colsten Posts: 17,597
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    It would seem that some providers are allowing a one-off withdrawal without penalty on restricted access accounts in order to let the customer reduce their holding to less than £75k.
    RF
    Some may be a bit quicker off the mark than others, but all of them will have to offer this.
  • I have an ISA with over 75k in it and the provider has written advising I can make one withdrawal with no penalty. However, they state the the funds withdrawn are sent as a cheque. This means I lose 10k of tax free savings. Does anyone know if there is any means to avoid this other than leaving the funds in place until the investment comes to term and I can transfer some to another ISA?
  • colsten
    colsten Posts: 17,597
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    Complain.

    They must offer you the option of an ISA transfer for the £10K.

    Although you could probably earn more interest outside an ISA for £10K
  • Sillychuckie
    Sillychuckie Posts: 1,208
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    I have an offset savings acount (it offsets a mortgage with the same provider), with a balance in excess of the 85k.
    It is a seperate account, but is 'linked' so the interest on it is deducted from my mortgage balance.

    e.g.
    I owe £150k on a mortgage.
    By keeping £150k in the offset savings account, I pay no interest on the mortgage.

    If the institution went under (so they take my 150k savings), am I then settled on my mortgage?
    Or - can someone buy the debt and say I still owe the 150k?

    If this is true, surely any offset mortgage with an offset facility containing a balance > 75k is at risk of loss?
    Doesn't this really devalue the benefits of offset mortgages?

    I'm worried now. :(
    SC.
  • sjp1966
    sjp1966 Posts: 83
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    Apologies if this is in the wrong place but I couldn't see an option that would be a better fit.

    I currently have a paltry cash ISA with Santander which pays a negligable amount of interest, that year is now up and I am thinking of putting the money into a Cash ISA with Nutmeg

    I am just trying to find some opinions on Nutmeg in terms of what they are like, do I have any form of protection through them in terms of my initial investment amount?

    Thanks
  • george4064
    george4064 Posts: 2,801
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    sjp1966 wrote: »
    Apologies if this is in the wrong place but I couldn't see an option that would be a better fit.

    I currently have a paltry cash ISA with Santander which pays a negligable amount of interest, that year is now up and I am thinking of putting the money into a Cash ISA with Nutmeg

    I am just trying to find some opinions on Nutmeg in terms of what they are like, do I have any form of protection through them in terms of my initial investment amount?

    Thanks

    Read here, from Nutmeg's website: https://www.nutmeg.com/legal/terms-and-conditions
    "If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett

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  • sjp1966
    sjp1966 Posts: 83
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    Thanks George for the link, that explains one aspect, do you have any experience with Nutmeg in order to offer any general opinions on their service?
  • george4064
    george4064 Posts: 2,801
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    sjp1966 wrote: »
    Thanks George for the link, that explains one aspect, do you have any experience with Nutmeg in order to offer any general opinions on their service?

    I do not have any personal experience with them, but what I do know is that they're expensive for what they are (simply passive 'robo-advice' ETF portfolios).

    You will be paying (relatively) an arm and a leg for that 'advice', whereas you could just construct your own passive ETF portfolio and pay about 0.07% total charges, nutmeg will be more like 1% total charges.
    "If you aren’t willing to own a stock for ten years, don’t even think about owning it for ten minutes” Warren Buffett

    Save £12k in 2021 - #027 £15,268 (76%)
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