FSCS increase to £50K

twizzel

Does anyone know the status of the proposed increase in compensation provided by the FSCS to £50K ?
In particular,
1. is it definitely going to happen ?
2. when will it happen ?

Paul_Herring

1) "Highly likely" according to some articles
2) Dunno

Article from 16th August: http://business.edp24.co.uk/content/personalfinance/story.aspx?brand=BIZOnline&category=PersonalFinance&tBrand=BIZOnline&tCategory=PersonalFinance&itemid=NOED16%20Aug%202008%2010%3A16%3A18%3A623
17th August: http://www.thisismoney.co.uk/news/columnists/article.html?in_article_id=450066&in_page_id=19&in_author_id=3&position=moretopstories
21st August: http://www.thisismoney.co.uk/saving-and-banking/article.html?in_article_id=433452&in_page_id=7&ct=5

opinions4u

I question again the value of the FCSC if a big player goes under. I don't see that it makes any difference if the limit is £50k, £500k or £5m.

Seems to me it is a scheme that has the positive impact of underpinning confidence in banking, but as a near empty pot of cash it's like saying "If anything goes wrong, I can clear my mortgage with the contents of my wallet".

If a big player went under, the government would have to lend the scheme a hell of a lot of money and the banks would have to repay this over a hell of a lot of years.

The nation would have to borrow, the economy would stagnate significantly more than we are seeing at the moment and future returns from savings accounts would be massively reduced.

Cheery thoughts for the day!

dag_2

The nation would have to borrow, the economy would stagnate significantly more than we are seeing at the moment and future returns from savings accounts would be massively reduced.

Yeah, agreed. One point that no-one seems to have raised is the question of whether the UK government itself is good for the money.

Nation state governments can't always be relied upon to pay their bills - including their state benefits, state pensions, government bond dividends, and public sector wages - importantly, not forgetting the payments they need to make to ensure that civil and criminal law enforcement systems continue to function. After all, there's no point in holding on to any money or property if there's no functioning mechanism to enforce penalties against those who might steal or defraud you of it. That's why there needs to be a law enforcement system for money to hold its value.

So when governments do pay out, the currency they pay out in can't always be relied upon to hold its value. This is especially true if public administration and law enforcement is a bit of a mess. Look at Zimbabwe for example.

Now I'm not suggesting that the things that have happened in Zimbabwe are likely to happen in the UK any time soon. But why do we assume that the UK nation state is any stronger financially than any other state in the world?

I think we need to try to weigh up the financial strength of the different nations more objectively than that. And I also think that the Financial Services Compensation Scheme needs to be considered in this context.

Jonbvn

Have you started digging your bunker yet?

Perhaps MSE Housing could offer some advice on bunking building techniques?

On old fashioned money saving they will offer you advice on making your own tin foil hats, rather than buying them in Tesco.

On MSE house prices fourm you can learn to defend yourself and the right time to attack!