Intelligent Finance - safe ?

GustyGardenGalaxy

A close friend of mine is getting twitchy as he apparently has over £100K split across a couple of JARs (JARs? is that right?) in Intelligent Finance (apparently a subsidiary of the Bank of Scotland).

Should he be looking to transfer some of this money to bank or investment accounts elsewhere, perhaps in amounts of £35K or less?

If so, which ones are 'safe' AND will provide a similar rate of interest to Intelligent Finance?

Thanks

tradetime

which ones are 'safe'

Simply put, none!
Banks survive on confidence, if enough people run around whipping enough other people into a panic that causes mass withdrawal and loss of confidence then any bank can go down.

GustyGardenGalaxy

Thanks, but would it be advisable for my friend to transfer some funds from his large Intelligent Finance JAR to other accounts so that he only has £35K or less in each account?

dunstonh

Its now owned by Lloyds so no need to panic

Speculator

Yes, I wouldn't keep more than £30K in any bank/BS. Remember, if your friend kept £35K in the account and if interest is added to the account, the interest will not be covered because it will take it over the compensation limit.

tradetime

GustyGardenGalaxy wrote: »

Thanks, but would it be advisable for my friend to transfer some funds from his large Intelligent Finance JAR to other accounts so that he only has £35K or less in each account?

Tbh, I would consider it common sense in the current environment not to have more than the protected amount in any one financial institution where practical. Since I have no idea what a "JAR" is, other than for keeping my coffee in, I couldn't comment on that specifically. That said, I wouldn't run around like a headless chicken trying to get it sorted.

mountaindreams

Hi,
Can anyone clarify the situation where a mortgage and savings are held in IF. I've seen conflicting information.

For example if I had 100k mortgage and 50k savings with IF. So the savings are offsetting againt the mortgage and effectively paying interest on just 50k of the mortgage.

If the bank were to get in trouble would the entire 50k savings be taken away from the 100k mortgage to leave a mortgage of 50k. Or would it just be 90% of the 35k that would be taken away therefore leaving approx 65k mortgage and no savings?

Thanks

Andrew_Tobin

I would warn everyone not to use the IF telephone banking service. I recently called IF and they asked for my account number and all 4 digits of my security code...and over the phone. Anyone with a crossed line, or listening in, could do whatever they liked in my account and I could not argue as they would have all the security codes.

vwcampervan72

We've been with IF for years and havent had any problems with them asking for the 4 digit code,

ive only ever been asked for 2 of the 4

never all 4 of them.

opinions4u

mountaindreams wrote: »

Hi,
Can anyone clarify the situation where a mortgage and savings are held in IF. I've seen conflicting information.

For example if I had 100k mortgage and 50k savings with IF. So the savings are offsetting againt the mortgage and effectively paying interest on just 50k of the mortgage.

If the bank were to get in trouble would the entire 50k savings be taken away from the 100k mortgage to leave a mortgage of 50k. Or would it just be 90% of the 35k that would be taken away therefore leaving approx 65k mortgage and no savings?

Thanks

You'd be down to a £50k mortgage.

Pinched from the FSCS site (acknowledgement to whoever pointed me there the other day):

"
Amounts owed to the failed firm (for example, loans, mortgage or credit card debts) are taken into account before any compensation is paid.
If you are a borrower with the same firm this may affect the amount you can claim, as the amount of your deposits may be 'set-off' against any amounts you owe.
If a firm were to fail, FSCS would consider a depositor's overall net claim, which would include taking into account any amount owed which the firm may set off.
In the event that set off is applied, and if the borrowings exceeded the depositor's savings, there would be no overall claim against the failed firm, and the depositor would not be entitled to any compensation.
For example, if a depositor had a mortgage of £200,000 and savings of £150,000 with the same bank, set off may be applied by the Insolvency Practitioner dealing with the bank failure. As a result, the depositor may end up owing the bank £50,000, so there would be no positive balance and no claim for compensation."

http://www.fscs.org.uk/consumer/FAQs/Deposit_claims_FAQs/