35k protection offset question...

Bullygig

Not sure if this is the right forum but would appreciate any advice.

Does anyone know the position if a bank goes under and you have more than £35k in savings with them which is offset against a larger mortgage with the same company?

e.g. (made up numbers)

Savings 100k
Mortgage 250k

Bank goes pop. Do you owe them 150k but you have to recover the 100k?
Do they sell on the mortgage to another company but you lose your savings?

Thanks in advance...

opinions4u

Removed my original reply as it seems I was incorrect!

Paul_Herring

The protection is on the net amount. You'd owe 150K, with no savings to speak of.

Turning it around, if you had (for some strange reason) 100k of debt, and 140k of savings, you'd have 40k net savings, of which 35k would be guaranteed.

Not sure where opinions4u got their 215k figure from.

YorkshireBoy

Paul_Herring wrote: »

Not sure where opinions4u got their 215k figure from.

Maybe it was just that...an 'opinion'.

OP, the 'fact' (which backs up Paul's post) is here...

http://www.fscs.org.uk/consumer/FAQs/Deposit_claims_FAQs/ (see Q5)

nicko33

Paul_Herring wrote: »

Not sure where opinions4u got their 215k figure from.

Looks like 250k-35k, using the wrong assumption that only 35k of the 100k savings would be offset against the 250k debt.

opinions4u

Nicko is right in where I got the figure from!

Paul (or anybody!), do you have a link to anything that will conclusively say that somebody with more savings than debt is still covered up to £35k NET figure.

e.g.

£80,000 savings
£50,000 mortgage
=£30,000 net < £35k therefore effectively fully covered?

YorkshireBoy

I'm not sure about 'conclusively', but if you take a look at the last line of Q5 (in the link above) it says...

"...so there would be no positive balance and no claim for compensation"

...which would seem to imply/infer/indicate/mean/state that, should the net balance be positive (ie more savings than debts), a claim for compensation would be possible (up to £35K anyway).


Edited to say: I'm sure conclusivity will be found in the FSCS section of the FSA handbook (but I'll be b******d if I can find it in there!)

Bullygig

Many thanks gentlemen, just the info I was looking for and have been unable to find by myself!!

Has re-assured me somewhat, I was worried that the debt may be sold on and the savings could be at risk!