How long would it take for FSCS to pay up?

sadabbott

If my bank collapsed on the 7th October, when could I expect my cheque for £50k?

Would I get interest for the period between the collapse and getting the cheque?

KingL

Jeez, you definately win the prize for most paranoid new threads in a single day :0

dunstonh

The only time the FSCS has had to pay out to date on a bank involved no payout to individual account holders. So, the time was effectively zero.

[Deleted User]

See post 27 of thread Kaupthing Edge thread with a twist - who's not bothered?

Or the link to it is: http://forums.moneysavingexpert.com/showpost.html?p=14718613&postcount=27

fatpig_2

sadabbott wrote: »

If my bank collapsed on the 7th October, when could I expect my cheque for £50k?

Would I get interest for the period between the collapse and getting the cheque?

Are you on a wind-up? Or are you genuinely the king of the sheep on here?

sadabbott

I am just interested and trying to learn.

No offence intended - it was a hypothetical question.

pumpndump

I am not an expert on banking myself, but there are people in my office who are. I had lunch with one last Monday, and I will tell you what she told me.

Firstly, the scheme does not hold any funds. If a bank went bust, it would wait for all the claims to come in, and then go out and look for the money, which will take time. During this time, you will not be paid any interest while your money is held in abeyance.

If you have £50,000 in the Royal Bank of Scotland, and £50,000 in NatWest, you will be regarded as having £100,000 in RBS group. You will only get £50,000 back.

FCSC will not honour any agreement you have with your bank. That includes wages being paid into your bank, standing orders, direct debits. You'll have to sort those out yourself. She also said that although no one knew for sure, the consensus is that you will not be paid any interest on any money you have had deposited, and will only receive the money you put in.

I asked how long it would take for an account holder to receive compensation. The reply I received was: "How long is a piece of string?"

She told me that the best thing to do would be to remove your money before the bank went bust, if this was at all possible.

sadabbott

pumpndump wrote: »

I am not an expert on banking myself, but there are people in my office who are. I had lunch with one last Monday, and I will tell you what she told me.

Firstly, the scheme does not hold any funds. If a bank went bust, it would wait for all the claims to some in, and then go out and look for the money, which will take time. During this time, you will not be paid any interest while your money is held in abeyance.

If you have £50,000 in the Royal Bank of Scotland, and £50,000 in NatWest, you will be regarded as having £100,000 in RBS group. You will only get £50,000 back.

FCSC will not honour any agreement you have with your bank. That includes wages being paid into your bank, standing orders, direct debits. You'll have to sort those out yourself. She also said that although no one knew for sure, the consensus is that you will not be paid any interest on any money you have had deposited, and will only receive the money you put in.

I asked how long it would take for an account holder to receive compensation. The reply I received was: "How long is a piece of string."

She told me that the best thing to do would be to remove your money before the bank went bust, if this was at all possible.

that is really scary

pumpndump

sadabbott wrote: »

that is really scary

Maybe. But so long as you know what the rules are, you will know what to do. One has to remember that this is a scheme that pays basic compensation. There are some posters on here who are very naive about this, and seem to think that it is a magic wand. And, as I said, I did not know too much about it myself. In fact, I knew more about the American scheme than the British one.

I did not make it clear on my original posting, if you have £50,000 in RBS and £50,000 in Barclays, you would get £100,000 back, because they are two different companies.

jamesd

The FSCS paid out for Bradford & Bingley on 29 September, as part of the transfer to Abbey. There was no significant interruption of consumer's access to their money after the FSCS was triggered.

"8. The FSCS was triggered following the determination by the FSA that Bradford & Bingley was unable or likely to be unable to satisfy claims against it, prior to the making of the Transfer Order.

9. Under the Transfer Order, the FSCS has paid out approximately £14bn to enable retail deposits held in Bradford & Bingley and covered by the FSCS to be transferred to Abbey. The Treasury has made a payment to Abbey for retail deposit amounts not covered by the FSCS, amounting to approximately £4bn"

Similar arrangements are likely if the scheme is needed again.

jamesd

edwinac, please cut out the personal attacks. Attacking the arguments is fine, but not the person making them.