Bradford & Bingley

Loobeylou

Can anyone advise what the situation is with getting money back from the Bradford & Bingley should everything go belly-up?

I only have a small amount invested, but I set up an account there a few months ago for an elderly relative, with an investment in a postal account of approximately £20K.

Not sure what the guaranteed amount is for return to each investor.

Advice please.

barak

http://www.moneysavingexpert.com/savings/safe-savings

Masomnia

Hi Loobeylou, when you say investments do you mean savings? I don't mean to sound condescending, but a lot of people don't realize there's a difference. Investments meaning owning stock in a company, and savings meaning have a no-risk savings account.

Anyway, I'm guessing you mean savings since you mention a postal account.

Basically, the first £35k, per person, per institution, is guaranteed by the FSA in the event of a bank collapsing. Which they won't let happen anyway, like in the Northern Rock case no savers lost any money, only investors. So your relative's money is safe.

Loobeylou

Many thanks for being so prompt with your replies Masomnia and Barak.

You are correct in thinking that I am talking about savings, not stocks and shares - sorry if this caused any confusion.

I must admit when I heard the news this afternoon I started to get a bit twitchy, and then remembered there was some form of guaranteed return payment, but did not know what that sum was.

As you can maybe understand, when you are dealing with someone else's finances and have recommended that institution for investment, you don't want to take any chances!

edindie

B&B’s not going to go bust. If it starts going that way (as in really starts) then it will be snapped up a la Bear Stearns. Either that or the gvt will comondeer it and sell it when the market picks up again.

Loobeylou

On reading through the link given by Barak, it states that that although the first £35K is covered, it is not totally covered - "you'd get 100% of the first £2,000 of your cash back and 90% of the next £33,000 on top".

Common sense tells me that they would not allow the Northern Rock situation to happen again, but it does concern me nevertheless.

Masomnia

"The amount was changed on the back of Northern Rock; if an institution had defaulted earlier (only very niche players), you'd get 100% of the first £2,000 of your cash back and 90% of the next £33,000 on top; so you'd get £31,700 of the first £35,000 back."

That was the old system, changed after after northern rock.

mjr600

A precedent has already been set by HM Gov in relation to financial institutions of the size of B&B with their response to the Northern Rock situation.

Neither the Gov nor the UK banking system can afford for the B&B to 'go down' and then fall back to the FSA compensation scheme.

The entire UK economy would be destabalized and the banking system would be impacted for years. We would risk reverting to a broadly cash economy and there's no money to be made from the folding for the banks.

There are many fearmongers and scare stories to be found in the papers, the net and on TV but fear sells so it is not at all suprising.

6022tivo

Thing is, as I understand it. B&B's books are fine... If they do crash, they still carry on..

Do people think, if they do go bust and the savings are lost, do people who have b&b morgages written off also???.

B&B will be fine. They have lots of cash coming in from morgage payments, and have their name on many many deeds around the country.

caveat_emptor

6022tivo wrote: »

B&B will be fine. They have lots of cash coming in from morgage payments, and have their name on many many deeds around the country.

Isn't that the problem? B&B don't have lots of money coming in because the buy-to-let mortgagees are defaulting and the property is now worth less than the loan which is what happened in the States.

bristolleedsfan

6022tivo wrote: »

B&B will be fine. They have lots of cash coming in from morgage payments, and have their name on many many deeds around the country.

Sounds like a labour politician, everything in the garden is rosy. :rotfl: