Icesave - 11 Days Later & We Are No Wiser

meunier

In support of Moola's penultimate posting and the fact that this is, in fact, what the FSCS have been saying for two weeks now on the phones, I attach a link to Paul Lewis on BBC Breakfast today which suggests that it will be a one-stop payment, ONCE AGREEMENT HAS BEEN REACHED WITH ICELAND. This is worrying as he suggests that the "pain" of the savers are being used as leverage tools by the British Government in their dealings.

http://news.bbc.co.uk/1/hi/business/7677639.stm

JEFFWT

I found this posted by someone on Usenet (uk.finance) this Thursday.

'I just spoke to the FSCS (financial services compensation scheme).
They said they got all the relevant data from Icesave, and will be writing to all depositors in the next 1-2 weeks. A printed statement from the Icesave website should suffice, but the form that will be sent will contain more detailed instructions. No clear indication exists on the timeline, but the operator said around Christmas. Of course none of this is final yet.'

For those who haven't heard of it, Usenet is a world-wide distributed Internet discussion system covering just about any subject...
In general , anyone can post whatever they like to whatever group they want so you've got to take care what you believe!
This one seems genuine.

Jeff

AB31

moola wrote: »

On the day Icesave was declared in default by the FSCS we became creditors of the bank in liquidation in UK law. At that point, Icesave broke each seperate contract it had with each individual depositor and any agreement as to interest rates to be paid and for what term ceased to apply. My expectation is that term and instant access account holders will be treated identically by the FSCS in that they will all be due interest up to the date of default and none after. I also expect all depositors will receive their refunds in the same timescale. I stand to be corrected and I have no legal or financial expertise, this is just the conclusion I have come to when you look at how default is usually treated.

Re the underlined bit, your "expectation" conflicts with the FSCS's published guidance on this matter which has been set out in various previous posts on this forum. See Q8: http://www.fscs.org.uk/consumer/FAQs/Deposit_claims_FAQs/.

From this it's clear that, if the FSCS follows the procedure as set out, fixed rate accounts will receive interest up to the date of normal maturity and funds can't be withdrawn sooner. Similar provision for "notice accounts" but I don't think Icesave have any of this type of account. Further, it seems that all interest will be paid at the maturity date only, even though the bond may have provided for monthly interest.

Instant access accounts won't receive interest after the date of default. It's the latter which seems most unfair if there's a long delay, but I believe that the politicians may be amenable to modify this if there is enough pressure from irritated customers. After all, the Chancellor said that no retail customer will lose out, and 3 months loss of interest is not insignificant.

SarahNeedle1872

cwcw wrote: »

Agreed. It's not fair to effectively carry on paying interest on one set of accounts after the default date, but not on another set of accounts. If interest is to still be paid on fixed bonds until maturity, then interest should also still be paid on instant access accounts until the date of the claim being settled.

A very valid point cwcw, but at the moment, I would just be happy to get my capital back, never mind any interest! It may only be £5k but thats a lot of money to me!
I'm sure the FSCS are doing everything they can to get this sorted, I have faith, and am patiently waiting.....

AB31

SarahNeedle1872 wrote: »

A very valid point cwcw, but at the moment, I would just be happy to get my capital back, never mind any interest! It may only be £5k but thats a lot of money to me!
I'm sure the FSCS are doing everything they can to get this sorted, I have faith, and am patiently waiting.....

I would perhaps agree with you on an amount of £5000, but some people have a heck of a lot more than that invested in the damned place and they rely on interest to help keep them going.

LesU

Paul_Herring wrote: »

1) Not all the savings are taxable. You want your cash ISA paid into your current account?
2) Your linked account is with an institution not covered by FSCS you say...?

There are sufficient numbers of people affected by both or at least one of the above to say no to 'just dump it into the linked account.'

Another factor is one that my bank, Cahoot, has set in place. It limits DD incoming to a maximum of £5000. It was a real pain last time I transferred from one savings account to another, doing it in £5000 chunks.
Anyway, I certainly wouldn't want all of my funds to end up in one bank, even for a short while.

fishingdobbie

LesU wrote: »

Another factor is one that my bank, Cahoot, has set in place. It limits DD incoming to a maximum of £5000. It was a real pain last time I transferred from one savings account to another, doing it in £5000 chunks.
Anyway, I certainly wouldn't want all of my funds to end up in one bank, even for a short while.

I have just moved two lots of £10.000 from KE,one from my account and one from my wifes into cahoot with no problem?

SarahNeedle1872

AB31 wrote: »

I would perhaps agree with you on an amount of £5000, but some people have a heck of a lot more than that invested in the damned place and they rely on interest to help keep them going.

I know, and I really feel for them! I am lucky that I am not relying on that money for a monthly income, and I hope for everyone's sake that it is sorted sooner rather than later

meunier

I have just spoken with 'Angela' at the FSCS who told me that they have NEW information today and that they are instructed to say that any FIXED TERM Icesave account would be honoured with interest at the MATURITY of the term with the interest owed.

I had put my life's savings in the Icesave account so that I could use it as a salary and honour the commitments I made to the charity that I founded in 1997. I am in a real pickle here as I will now have to find SOME job - what I don't know - but I do now know (as of TODAY) that I will not be able to honour the commitments I made in good faith on behalf of the charity for the next year.

I wonder if other people are in a not dis-similar situation?

I would be most interested to learn.

meunier

I have just spoken with 'Angela' at the FSCS who told me that they have NEW information today and that they are instructed to say that any FIXED TERM Icesave account would be honoured with interest at the MATURITY of the term with the interest owed.

I had put my life's savings in the Icesave account so that I could use it as a salary and honour the commitments I made to the charity that I founded in 1997. I am in a real pickle here as I will now have to find SOME job - what I don't know - but I do now know (as of TODAY) that I will not be able to honour the commitments I made in good faith on behalf of the charity for the next year.

If I had known, of course, that I was not able to receive monthly interest I would not have invested in the product. Indeed, I took a slightly lower level of interest for the additional security.

That said, I am deeply, DEEPLY grateful to know that EVENTUALLY I will be able to receive the funds back.

I wonder if other people are in a not dis-similar situation?

I would be most interested to learn.