All eggs in HBOS basket - shall we cut our interest losses?

domcastro

OK - not financially minded. Me and my mum didn't know about 35k limits and certainly never thought Halifax would get into trouble. We are both anxious about the current climate and our money.

Mum : Has about 40K in HBOS Websaver, 60K in HBOS fixed-term high interest (term until October 26th 2008) and about 100k in a HBOS Guaranteed Investment Plan (started March 2006). The Websaver money will now be put into another bank. Should she cut her losses and end her fixed term account early and spread the wealth? or will HBOS be stable until end of October? Her Guaranteed Investment Plan is worth less now than her original deposit (for example, it lost £800 yesterday!) Is this protected through a different scheme? ie. if HBOS went bust (I know the Gov probably wouldn't allow it, but...) would my mum get 35k back from savings and 48k back from Guaranteed Investment Plan? Also, should she cut her losses on this investment or ride the current storm and forget about it for a few years?


Me: Sold my house and relocated for a new job. Seems the timing was nice as I'm now in rented with no chain. As I didn't know my new location (ie, the good and bad places to live), I decided to put my house money 80k in a fixed-term high interest account for 3 months (I knew I wouldn't be buying straight away). I also went with HBOS. The terms ends 1st November 2008 (one month left) - shall I leave the money there or cut my losses and split the money across other banks? This bank stuff has made me want to buy a house quicker than I would have because when I have a house I will have no money - so the problem is irrelevant! But, of course, everyone says wait to buy for a few months as house prices have yet to reach the price trough. I feel safer with Bricks and Mortar but as every human I wish to get the best house at the cheapest price!
Please advise.

If you only have time for one bit of help - then please advise if my mum is protected for 35k savings and 48k investments?
many thanks

dunstonh

Should she cut her losses and end her fixed term account early and spread the wealth?

Only if she is so paranoid that the second strongest bank in the UK and one of the safest is going to go under.

Her Guaranteed Investment Plan is worth less now than her original deposit (for example, it lost £800 yesterday!) Is this protected through a different scheme?

Investments are protected on the investments protection scheme with the exception of life funds and pensions which fall under the insurance protection scheme.

Also, should she cut her losses on this investment or ride the current storm and forget about it for a few years?

What are her investments? - being Halifax we will know they are rubbish so transferring may be in order but that is an answer to a question you havent asked

But, of course, everyone says wait to buy for a few months as house prices have yet to reach the price trough.

A few months? The last house price decline took place over nearly 5 years. This one is expected to be worse than that one.

I feel safer with Bricks and Mortar but as every human I wish to get the best house at the cheapest price!

The risk is that you could buy a place for £150k now, borrow 70k and find in three years time that the house is worth £80k

domcastro

Thanks for advice