Cash only - Can we relax?

caveman38

Like many people, I have all my life savings in cash as I got out of shares as I approached pension age.
I have monies (ISA's, Tessas etc) in Nationwide and further sums in both the Halifax and Barclays in term bonds. None of these exceed the guaranteed £50K. But still I worry, is that needless?
Can we relax in the knowledge that whatever happens those savings are secure or could the problem escalate to a position where the FSA / Government would not be able to guarantee those savings and we could lose them.
Many like me most probably are reluctant to withdraw savings on fixed term interest rates or where they benefit from tax-free status ie. ISA's to deposit them in NS&I for greater security.
Are we worrying unnecessarily and could the £50K guarantee be withdrawn if things get worse. Some of us need some reassurance ...... please.

Swipe

To be honest, I'm more concerned with my savings being eroded by true inflation and rising living costs than the FSCS being withdrawn.

Bernard_Coleslaw

caveman38 wrote: »

Like many people, I have all my life savings in cash as I got out of shares as I approached pension age.
I have monies (ISA's, Tessas etc) in Nationwide and further sums in both the Halifax and Barclays in term bonds. None of these exceed the guaranteed £50K. But still I worry, is that needless?
Can we relax in the knowledge that whatever happens those savings are secure or could the problem escalate to a position where the FSA / Government would not be able to guarantee those savings and we could lose them.
Many like me most probably are reluctant to withdraw savings on fixed term interest rates or where they benefit from tax-free status ie. ISA's to deposit them in NS&I for greater security.
Are we worrying unnecessarily and could the £50K guarantee be withdrawn if things get worse. Some of us need some reassurance ...... please.

To be honest, it sounds like you've got all bases covered. I really wouldn't worry, if I were you. If you were to take cash out of fixed term bonds or ISAs, that's when you would be losing money (withdrawal penalties, loss of tax benefit, etc).

MadBill

caveman38 wrote: »

Like many people, I have all my life savings in cash as I got out of shares as I approached pension age.
I have monies (ISA's, Tessas etc) in Nationwide and further sums in both the Halifax and Barclays in term bonds. None of these exceed the guaranteed £50K. But still I worry, is that needless?
Can we relax in the knowledge that whatever happens those savings are secure or could the problem escalate to a position where the FSA / Government would not be able to guarantee those savings and we could lose them.
Many like me most probably are reluctant to withdraw savings on fixed term interest rates or where they benefit from tax-free status ie. ISA's to deposit them in NS&I for greater security.
Are we worrying unnecessarily and could the £50K guarantee be withdrawn if things get worse. Some of us need some reassurance ...... please.

Hi, I'm no financier, but when you look at the ENORMOUS sums of leveraged loans (debt - not REAL money) compared to the true amount of actual 'cash' (in the form of cash savings) the last thing any government would want to do in these times is let the 'system' lose its real assets (i.e your cash and other prudent savers). To do so by allowing banks to fail to honour their "I promise to pay the bearer.... etc" would lead to cataclysmic social unrest (and possibly worse)..... I would sleep tight! I'm trying to think of what other options there would be anyway -
(1) withdraw all cash and keep it under the matress? Possible, but if everyone did that the entire system would indeed collapse - that's why gov't would effectively (without saying the words) guarantee all cash savings (even in excess of the 50K)
(2) withdraw all cash as above, but buy gold. Errrmmmm, same result!

IMHO you did the right thing (as anyone should do) as retirement approaches - generally divest yourself of investments and turn to cash.

nilrem_2

MadBill wrote: »

Hi, I'm no financier, but when you look at the ENORMOUS sums of leveraged loans (debt - not REAL money) compared to the true amount of actual 'cash' (in the form of cash savings) the last thing any government would want to do in these times is let the 'system' lose its real assets (i.e your cash and other prudent savers). To do so by allowing banks to fail to honour their "I promise to pay the bearer.... etc" would lead to cataclysmic social unrest (and possibly worse)..... I would sleep tight! I'm trying to think of what other options there would be anyway -
(1) withdraw all cash and keep it under the matress? Possible, but if everyone did that the entire system would indeed collapse - that's why gov't would effectively (without saying the words) guarantee all cash savings (even in excess of the 50K)
(2) withdraw all cash as above, but buy gold. Errrmmmm, same result!

IMHO you did the right thing (as anyone should do) as retirement approaches - generally divest yourself of investments and turn to cash.

Good answer Bill. :T