MARTIN LEWIS on "It pays to watch" says we may NOT be paid interest (ICESAVE)...

bignoise

Birdie100 wrote: »

but rafter, all of Bradford and Bingley's interest payments are safe; all of Northern Rock's interest payments were saved; all of Kaupthing's interest payments have been saved, so why shouldn't Icesave's in turn?

B&B, NR and Kaupthing were all taken over and are still trading. Icesave is not in that position, so it's an entirely different thing.

drsue_2

The guest on working lunch has just said that all interest until 7th October will be paid.

.nickster_2

This all raises a lot of issues:

-the taxpayer may not ultimately pay for this because the FSCS may rake back the money from the icelandic govt for their poor rregulation of Landbanski ie "GB to sue Iceland" as in papers yesterday

-if your p*ssed off about losing interest i can understand (I had 210,000 in Icesave and was due ~ 12,000 gross in Nov) but just think ourselves lucky for getting our deposits back. It would have set me back years financially. I moved jobs last year and sold my house ploughing all the equity and most of my savings into Icesave. I've been made to feel like an irresponsible investor over the last few days and i take the point of spreading 'risk' however who would guess that a deposit account could go bust. I do read the financial pages but had not cottoned on about Iceland until a run started on the bank. By then too late. If everyone hadnt panicked and stated taking out their cash this would probably never have happened. The media and human nature saw to this!

I just thank... GB, AD, the FSA, the govt in general whoever saw to this bail-out. I wont 'look a gift horse in the mouth' and complain (too much ) about the (maybe) lost interest.

ray123

Rafter wrote: »

What would be the 'fair' thing to do?

Perhaps Icesave customers should receive what they would have earned if they had invested 'risk free' in National Savings and Investments.

R.

The rate of interest on NS&I's cash Isa has been cut by 0.2%, to 4.4% (who would invest in such a poor ISA!), while the rate on the premium bond prize fund has been reduced by 0.15% to 3.25%.
Tiered interest rates on NS&I's investment and easy access accounts are all down by 0.2%: the investment account pays 3% on balances under £500 and up to 3.9% on balances over £50,000, while the easy access account pays 1.65% on savings under £1,000 and up to 4.2% on balances over £50,000.

http://www.guardian.co.uk/money/2008/oct/07/savings.banks

Inflation is nearly at 5% - so they would actully be losing money?
Interest should be accrued until the day payment is received from the compensation scheme - whether it is one week or one year...

Come on you whingers, what are you going to do when certain councils put up council tax next year due to money lost in Landsbanki, Icesave's owner.? Are you going to complain to them or to anyone about that?

I dont think so. So stop having a go at hard working people about whether they should receive interest on their money...

StevieJ

Rafter wrote: »

Not sure any agreement is going to be reached on this one.....

What would be the 'fair' thing to do?

Perhaps Icesave customers should receive what they would have earned if they had invested 'risk free' in National Savings and Investments.

It certainly seems unfair that the rest of the industry and the taxpayers should be paying an above average interest rate for what turned out to be a risky investment.

You might as well start arguing that all the B&B shareholders should be re-imbursed.

If you think retail savings are all 'risk free' then they should all be priced the same and be government control and individual banks would have to 'bid' for savings from the central pot and pay a premium to government if they are more risky than the average.

But that would drastically reduce customer choice and competition.

Savers can't have it both ways though. You can't have introductory bonus' and higher rates without accepting that there is at least some risk to you from investing in smaller or startup banks versus long established players.

R.

I take it you have no Icesave accounts.

.nickster_2

Quote:
Originally Posted by strawberrylane
It will be a travesty if the UK taxpayer ends up paying for accumulated interest to Icesave customers who chose not to get out earlier, despite the warnings. That's the only way people will learn not to emulate the bankers and chase high returns regardless of the risks

@George - I agree with a lot of what you say, but I suspect there are a lot of people with fixed bonds opened a year ago or longer who haven't had the chance to get out earlier. Your comment is unfair in that respect.

That's why I said 'who chose not to get out'. It is different for bond holders who could not so so. Ideally a distinction should be made between those who could not get out and those who chose not to do so, but I doubt that it will.

Regarding those above who are more than happy to be bailed out by the taxpayer, and who are and putting two fingers up, this ridiculous Labour government (who such types no doubt vote for, and probably owe their livelihood to) will continue do this as it desperately clings to office. But the days of freebies for the non-contributors will come to an end sooner or later.


It was the getting out that caused the problem - a run on the bank. If everyone stayed invested this might never have happened. If the govt didnt bail out ICEsavers what do u think might have happened - loss of confidence in savings accounts, massive run on uk banks and an even more dire situation.

.nickster_2

This all raises a lot of issues:

-the taxpayer may not ultimately pay for this because the FSCS may rake back the money from the icelandic govt for their poor rregulation of Landbanski ie "GB to sue Iceland" as in papers yesterday

-if your p*ssed off about losing interest i can understand (I had 210,000 in Icesave and was due ~ 12,000 gross in Nov) but just think ourselves lucky for getting our deposits back. It would have set me back years financially. I moved jobs last year and sold my house ploughing all the equity and most of my savings into Icesave. I've been made to feel like an irresponsible investor over the last few days and i take the point of spreading 'risk' however who would guess that a deposit account could go bust. I do read the financial pages but had not cottoned on about Iceland until a run started on the bank. By then too late. If everyone hadnt panicked and stated taking out their cash this would probably never have happened. The media and human nature saw to this!

I just thank... GB, AD, the FSA, the govt in general whoever saw to this bail-out. I wont 'look a gift horse in the mouth' and complain (too much ) about the (maybe) lost interest.


...and the loss of local authority cash is minimal ~ 1% local funding so a rise in council tax is unlikely although would make a nice excuse!

bignoise

ray123 wrote: »

Come on you whingers, what are you going to do when certain councils put up council tax next year due to money lost in Icesave?

The local councils didn't have their money with Icesave! They were investing with Landsbanki, Icesave's owner.

GeorgeHowell

.nickster wrote: »

Quote:
Originally Posted by strawberrylane
It will be a travesty if the UK taxpayer ends up paying for accumulated interest to Icesave customers who chose not to get out earlier, despite the warnings. That's the only way people will learn not to emulate the bankers and chase high returns regardless of the risks

@George - I agree with a lot of what you say, but I suspect there are a lot of people with fixed bonds opened a year ago or longer who haven't had the chance to get out earlier. Your comment is unfair in that respect.

That's why I said 'who chose not to get out'. It is different for bond holders who could not so so. Ideally a distinction should be made between those who could not get out and those who chose not to do so, but I doubt that it will.

Regarding those above who are more than happy to be bailed out by the taxpayer, and who are and putting two fingers up, this ridiculous Labour government (who such types no doubt vote for, and probably owe their livelihood to) will continue do this as it desperately clings to office. But the days of freebies for the non-contributors will come to an end sooner or later.


It was the getting out that caused the problem - a run on the bank. If everyone stayed invested this might never have happened. If the govt didnt bail out ICEsavers what do u think might have happened - loss of confidence in savings accounts, massive run on uk banks and an even more dire situation.

I am okay with the government bailing out deposits on this occasion, because it's the first time it's happened. But I'd like to see HMG announce that for foreign based banks there will no future bail out beyond what the FSCS is contracted to cover. That might mean no interest, nothing over £50,000, and the risk of a foreign scheme defaulting. If it causes a bit of a run on some foreign banks then so be it. Let's look after number one for a change and try to protect some British jobs in the financial sector. If people still wanted to leave their money in foreign based banks after such an announcement then they would be doing so in full knowledge of the risks.

jm104

This arguement will go no where. I have money in Icesave and thankfully will get it back - if I lose interest so be it. Most of it I couldn't touch as it was in a fixed account and the rest...well.. I've had a horrendous year and so didn't catch the warnings etc and the first I knew was when I got back from holiday on sunday (timing timing!!) But what doesn't help is blaming people and the BBCs iresponsible attitude as just heard on Jeremy Vine where they have allowed people to compare Icesave with ?Nigerian banks and other 'dodgy' investments. Come on folks admit it how many of you have considered Icesave - it has been recommended constatntly by all the national newspapers and Martin himself. It was not seen as a greedy dodgy investment but one where the small man was supposed to be able to 'get back at the banks'. I used it on Martins advice (ok I didn't read his later words but tend to put my money somewhere and leave it for a year or so and as said I've had a busy year with job moves, family deaths etc) and even last week the bank had a high credit rating. I also live in the country and chose to have an easy usable internet account. I know FIrst Direct are good but again left them after Martin pointed out that we were being charged to have an account. So its lose-lose - I stand not to inherit anything, make no big bucks on house sales and our mortgage will run until we are over 65. I'm not the last of the great speculators so stop having a go when I try and provide for my family!!!