ICESAVE - What is covered?

Niemand

Martin has posted an update about Icesave: What about Iceland's banks?.

Andrew64

Everything is moving so fast! This appears to be the latest situation:

UK savings frozen after Landsbanki goes bust


http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article4897712.ece?CMP=KNC-LBN&HBX_OU=50&HBX_PK=landsbanki

KDH_2

From Telegraph.co.uk.....


"Any money above £16,300 up to £50,000 is covered by the British compensation scheme.
Clare Francis, editor of the personal finance website moneysupermarket.com, said: "The good news for British customers is that even if the Icelandic scheme does not have enough money set aside, the rules mean that the British authorities will step in to cover all the shortfall."
In a statement, the Icelandic bank said: "Landsbanki would like to stress that the bank has not been put into liquidation but is in receivership which gives it a temporary protection from payment of debts and obligations as they fall due. Work has already begun on the restructuring of the operations of Landsbanki. The receivership committee and Landsbanki's CEOs share the view that operations over the next days will be performed in a manner as close to business as usual with a view to protecting Landsbanki's assets in Iceland and abroad."

Optimist

From http://www.fscs.org.uk/consumer/

FSCS gears up to assist Icesave's UK branch customers

In the light of the current uncertainties, the Financial Services Compensation Scheme (FSCS) is today gearing up in case it needs to assist approximately 300,000 savers at Icesave.

Icesave is the UK branch of Landsbanki Islands hf (trading here under the registered name Icesave). It is an EEA bank that is authorised by the Fjármálaeftirlitið (FME), the financial services regulator in Iceland. The Financial Services Authority in the UK has reported that Icesave is now expected to go into insolvency proceedings in Iceland and this would trigger an FSCS default.

Eligible savers with Icesave are protected by the Icelandic Depositors' and Investors' Guarantee Fund (IDIGF), up to a limit of the first 20,887 of their deposits. As an Icelandic bank Icesave is not automatically a member of the FSCS, but it opted to become a 'top-up' member. This means that eligible retail savers with Icesave's UK branch whose savings exceed the Icelandic limit would benefit from top-up compensation from the FSCS covering the amount over the Icelandic limit up to the new FSCS compensation limit for deposits of £50,000.

If the default is triggered as expected, FSCS will contact all UK savers directly with details of how to apply for compensation. Further announcements will follow and we will keep this page updated.

Please watch our website for more information.

blizeH

Optimist wrote: »

FSCS gears up to assist Icesave's UK branch customers

There's something simply wonderful about this. I don't know why, but when I read that it bought a smile to my face, for a situation that's actually very bleak, it's actually very comforting that already they're putting plans into place to help users get their cash back.

Good stuff, I just hope it goes smoothly and people do actually get 100% of their deposits back. Fingers crossed.

fernandes

Optimist wrote: »

As an Icelandic bank Icesave is not automatically a member of the FSCS, but it opted to become a 'top-up' member.

I'm certain when I opened an account with IceSave just under two years ago (around its boom time for applications) their FAQ mentioned nothing of this and simply said it was protected by the FSA in just the same way as all other banks.

I see now they're a little more candid about how protection is achieved (as has been explained in the media today) http://www.icesave.co.uk/financial-protection.html but I'm positive this wasn't explained at the time many of their customers signed up.

I'm not panicking at this stage but I do feel misled in the sale of this savings product. I'm also bemused the FSA allowed them to present themselves way it did as being backed by the FSA without asking them to qualify this 'top-up' liability status.

fernandes

I stand corrected (the wonders of Internet archiving) they did explain the two part coverage of liability back in 2006, however they imply that the UK scheme gives complete coverage too, it doesn't mention that this is only applicable to amounts over and above the Icelandic scheme:

http://web.archive.org/web/20061214053749/www.icesave.co.uk/faq_faq.html

At best its ambiguous, at worst it deliberately leverages the UK scheme in a 'best of both coverage' without admitting the UK compensation is not applicable for amounts supposedly covered by the Icelandic scheme.

rapid

Agreed,
it's described as top up compensation, so I too made the assumption that they would top up 'any' remaining compensation up to the current limit.

mjling

If money is recovered either through the Icelandic compensation scheme or through that and the UK FSCS, is there special dispensation for the owner to place the money back into ISAs even though the amount is larger than the annual allowance?

My mother has over £35k in ISAs with IceSave and even if she gets it all back she is unsure whether she effectively forgoes the current tax efficiency umbrella as she may no be able to shelter the compensation proceeds in ISAs immediately.

Anybody know how this works?

Thanks in advance.

Martin

vmf199

I went into town this morning (Tues) to set up an ISA with Natwest and filled out transfer form (to transfer from Icesave) and then when I got home this afternoon I saw the news that Icesave has gone insolvent. Is the transfer likely to go through or should I phone Natwest and cancel it?