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The Financial Crisis Backup Plan (Paranoid Approach)
vbrindle
Posts: 132 Forumite
It's recommended that you spread your savings. It was 35k per institution and now it's being increased to 50k.
This is all well and good but if a bank was allowed to collapse then where would you be?
Well if your bank did collapse then you would have trouble in the short term getting your money. You can put a claim into the FSCS and get your money back but it may take time for you to get it back. The compensation is guaranteed but the timeframe isn't.
Assuming you only bank and save with one bank I recommend that you save some money in another bank, ideally enough to cover a month’s salary.
This is totally the paranoid approach but people are getting paranoid with the current financial crisis.
At the end of the day my point is that I recommend that you have money spread out amongst several banks so you have immediate cash elsewhere should a bank fail. This is simply to cover living costs. A second current account may also help in the backup plan. You could arrange for your employer to pay to another account then.
My fear is that I get paid my wages then immediately my bank collapses.
This means I wouldn't be able to get my hands on the money. Even though it's protected by the FSCS it could take some time to get the money back.
For this reason I recommend you have some money stashed elsewhere to live off while you wait for your compensation.
It's the Paranoid approach but it's better to be safe than sorry.
I don’t personally think a bank in the UK would be allowed to go under but like I said, this is the paranoid approach.
Rather than put money in Irish banks I would spread your money amongst British banks, unless you have just won the lottery of course (you jammy !!!!!!)
This is all well and good but if a bank was allowed to collapse then where would you be?
Well if your bank did collapse then you would have trouble in the short term getting your money. You can put a claim into the FSCS and get your money back but it may take time for you to get it back. The compensation is guaranteed but the timeframe isn't.
Assuming you only bank and save with one bank I recommend that you save some money in another bank, ideally enough to cover a month’s salary.
This is totally the paranoid approach but people are getting paranoid with the current financial crisis.
At the end of the day my point is that I recommend that you have money spread out amongst several banks so you have immediate cash elsewhere should a bank fail. This is simply to cover living costs. A second current account may also help in the backup plan. You could arrange for your employer to pay to another account then.
My fear is that I get paid my wages then immediately my bank collapses.
This means I wouldn't be able to get my hands on the money. Even though it's protected by the FSCS it could take some time to get the money back.
For this reason I recommend you have some money stashed elsewhere to live off while you wait for your compensation.
It's the Paranoid approach but it's better to be safe than sorry.
I don’t personally think a bank in the UK would be allowed to go under but like I said, this is the paranoid approach.
Rather than put money in Irish banks I would spread your money amongst British banks, unless you have just won the lottery of course (you jammy !!!!!!)
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Comments
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What about buying a single gold sovereign periodically (no need to declare the purchase with HMRC) and simply hive them away.. If the need arises, gold coins are readily convertible back into funny-money.."If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks will deprive the people of all property until their children wake up homeless on the continent their fathers conquered."
-- Thomas Jefferson0 -
I am a little paranoid. I have a regular saver with Nationwide, with the amount I put in (£250 per month, the maximum) it pays 6% AER. If I needed it I could suffer a drop in interest for a month and withdraw £300 per day using cash card. I had more in mind some technical problem with my current account when I opened it.0
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For this reason I recommend you have some money stashed elsewhere to live off while you wait for your compensation.
How long did it take Bradford and Bingley customers to get their money after the FSCS paid out?
Although I understand the sentiment.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
B & B wasn't allowed to go under so as far as Joe Bloggs is concerned they walk into the branch as usual.
The big question I think everyone worries about is what if the government can't rescue yet another bank?
It's not likely to happen but people worry at the moment. Especially when there's news of bank shares tumbling.
It's a scary time.0
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