Icesave & Fscs

sadabbott

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 Fj!rm!laeftirlitið (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 euros 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.

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

nzseries1

sadabbott wrote: »

[...]authorised by the Fj!rm!laeftirlitið[...]

Gosh, what a mouthful.

AlanF

Martin's web site says

"The £50,000 limit applies to all the money in the account at the time the bank goes bust, meaning if you have accrued any interest, if it takes you over the threshold then it wouldn't be covered. So for total safety you should hedge and maybe put a maximum £49,500 or so in any one account".

I am wondering what happens to annually accrued interest (in my case due to be paid in Dec?). In the event of a collapse of the bank will the interest earned ( but not paid into the account) be reimbursed?

AlanF

AlanF

Martin's web site says

"The £50,000 limit applies to all the money in the account at the time the bank goes bust, meaning if you have accrued any interest, if it takes you over the threshold then it wouldn't be covered. So for total safety you should hedge and maybe put a maximum £49,500 or so in any one account".

I am wondering what happens to annually accrued interest (in my case due to be paid in Dec?). In the event of a collapse of the bank will the interest earned ( but not paid into the account) be reimbursed?

AlanF

Former_MSE_Dan

Hi AlanF,

We have asked this question of the FSCS and will add it to the article when we find out

Cheers

AlanF

Many thanks!

sadabbott

http://www.guardian.co.uk/money/2008/oct/07/savings.banks1
The government faces having to explain to thousands of British consumers how they have may lost savings following the collapse of the Icelandic back Landsbanki.
More than 300,000 Britons are thought to have had their cash in the bank's UK savings arm Icesave.
Most thought they would have up to £50,000 of their savings covered by the Financial Services Compensation Scheme (FSCS) in the event the bank failed.
However, since Landsbanki went into receivership this morning it has emerged that the compensation scheme was not quite as originally billed.
The UK's FSCS confirmed today that it is only responsible for "top-up" payouts to customers of Icesave.
It said this afternoon it was only gearing up to cover amounts over and above the €20,000 (£16,264) protected by the Icelandic government's deposit protection scheme.
This means that if the Icelandic government was unable to meet its obligations to UK savers they would only get back any holdings between €20,000 and £50,000; those savers with less than €20,000 would receive nothing.