Keep small savings as offset, or move to safety

SuperMum2008

My paultry savings of a few thousand pounds are currently sitting in an offsetting account against my IF mortgage. I understand that this means if the bank go bust, I would lose these savings as although I would be covered up to the £50k limit, they then take off the mortgage that is outstanding, so I would get nothing back. With this in mind, anyone know if it would be more sensible to move the savings to another savings account and go without the offsetting for a while, or should I ride the storm? Thankyou for any thoughts!

Locoblade

You wouldnt lose anything, don't worry.

If your mortgage company went bust they'd do one of two things. If they count your debts and assets as one net sum, then the worst that will happen is you'll owe mortgage minus savings (ie you'll have a smaller mortgage).

If they count your mortgage and savings seperately, then your savings will be protected by the £50k FSCS scheme.

If the former happens, then you could either chose to remortgage at the new lower amount owed, or remortgage to the original amount which will free up your savings again.

opinions4u

The government has signalled clear intent that it won't let any UK banks sink at the expense of their savers.

You're money is fine where it is.

Beats jumping out of the frying pan and in to an Icleandic fire!

SuperMum2008

Thankyou - think we will ride the storm and see where we end up..markets have been a little more stable anyway the last few days, so here's hoping (ive probably put a curse on it now!)