Safe with IF and Halifax?

smash

I have an offset mortgage with Intelligent Finance currently at £45K with savings offsetting the entire amount. In the meantime, I switched my current account to Halifax for the higher interest and have subsequently taken out the Guaranteed Reward Saver (£5K) and Monthly Saver (£1K so far) as well as moving my ISAs to them (£14K).

So all in all, I have about £65K in HBOS for mortgage and savings. I know that it's unlikely there will be any problems, but would everything be safe as it's well above the £35K safety net?

Steve_xx

No, it would not be safe as the total on deposit is in excess of 35k.

This is also an appropriate to to remind people who have deposits with Alliance & Leicester & Abbey to ensure that they due not hold in excess of 35k across the two banks. This is because of the likelihood that A&L are about to be absorbed by Santander, who are Abbey's parent now.

smash

That is worrying, so anyone with an offset mortgage with IF is at risk if they have more than £35K offset.

Maybe I should pay off as much as possible to keep it below £35K. Might give them a call tomorrow.

YorkshireBoy

I wouldn't be too hasty, and certainly wouldn't make any major financial decisions based on what I'd read on an internet forum (no offence Steve_xx). Nor would I take the word of a callcentre CSA.

Two things for you to consider...

1. Write to Halifax, so you get your answer in writing.

2. Consult www.fscs.org.uk (either online, in writing, or by telephone...but you want your answer in writing).

smash

Thanks for the reply, I will contact them and see what they have to say. I can understand the savings protection of £35K, but I think we need greater clarity on savings when used as an offset to a mortgage.

smash

I've just been reading Martin's article on "Are your savings safe" http://www.moneysavingexpert.com/savings/safe-savings

and found this:

Any debts with the same institution are subtracted from your savings
A piece of minutiae in the Financial Services Compensation Scheme rules dictates that if you have debts, such as a mortgage, loan or credit card with a bank that you also have savings with, any outstanding debts will be subtracted from the savings. For example if you have £20,000 in savings and a £15,000 loan, in the unlikely event that bank went bust you'll only get £5,000 compensation.

So basically my mortgage and savings that are offsetting it are effectively covered. Therefore I only need to consider my other savings for the £35K limit.