IMPORTANT! FSCS Icesave payouts to start in November...

kenshaz

moon-pig wrote: »

Last sentence.
"Interest owed to the depositor as at the date the bank is declared "in default" by FSCS will be paid as part of the compensation amount. Notice accounts will be paid as if notice had been served on the day the account was frozen and payment will be made, including interest, at the end of the notice period. Fixed term accounts will be paid at the maturity date with the interest that would have been paid by the bank at maturity date."

The situation is that the banks who are in FSCS scheme have not been levied to pay our monies ,the money is coming from frozen assets,not the compensation sheme . ICESAVE where not in the FSCS scheme ,therefore the terms of compensation do not apply.

This is a make up rules as we go along ,therefore all should get full interest ,not just those on a fixed interest. FSCS rules do not apply in these unique circumstances.

ISA holders will also lose relief whilst they wait for their certificate.

When we talking about payment of funds from a pot that is frozen ,which is generating revenue and not a levied amount from member banks of the FSCS all should receive full interest.

The trouble is you are all so grateful,you have given up.

What has actually happened is that those on fixed terms have lost nothing,and ICESAVE where not part of the FSCS sheme ,amazing.

Whilst non-fixed rate term accounts, including government ISA INVESTORS have lost large amounts.

soulsaver

briskly wrote: »

I've drawn up a spreadsheet to help sort out what to do with fixed term deposits. Assuming that:

A. The interest clock re-starts on the 8th October and interest accrual doesn't depend on when the FSCA get the forms back or process them

B. The interest rate is 6.7% APR (this this my original locked-in rate some might be slightly higher or lower)

C. The FSCA get the forms back by 6/12/08 and take 6 weeks to process the forms and get ready for payments (first payout likely on 17/1/08)

Calcs:

1. The gross loss of interest since 7 Oct on, for example, £35,000 is £336 if an electronic payout is requested and paid on 30/11 08.

2. Neutral point for fixed term deposits is 27/11/08 - for these accounts the loss of interest is same (around £320) whether the payment is electronic paid on 30/11/12 or by sending form and waiting until 17/1/08 for payment

3. For deposits maturing after this date, losses are reduced until, for deposits ending on 18/1/08 and after there is no loss of interest whatsoever - i.e. it is as if there had never been a problem




Hope this helps - lots of "ifs" still. please don't sue me if I've miscalulated!

Thanks Brisk, just perfect for me: it almost exactly is my circumstances.
There is a minor complication in that on another thread someone has (wrongly IMHO) interpretated the 6 weeks to start from maturity date. But if they are correct that would change the balance in close calls.

PS You could 'edit' & fix the dates?

kenshaz

Paul_Herring wrote: »

Ah - the latter then - you haven't read the FSCS rules.

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

But the rules do not apply . ICESAVE where not part of the FSCS scheme.

The payments are not compensation levied from member banks of the FSCS ,but it is being taken from a frozen pot.

soulsaver

nilrem wrote: »

People might say you "want your cake and eat it"! AFAIAA the government did not have to compensate the whole amount as they are doing, according to the rules they only needed to pay the difference between the £16k guaranteed by the Icesave passport scheme and the £50k max, people with £16k would have got nowt and people with more than the £50k would have lost the first £16k plus anything above the £50k.

I think many of us are just grateful that the government are paying out TBH, obviously none of us wants to lose interest but we can live with it.

Actually I am particularly grateful - the Gov could also have not brought the £50k forward too (which was a photo finish) so those over the £35k would have even more to be grateful for.
However I not sure that we should cut the Gov slack on all fronts:
The FSCS are the compensation of 'last resort' - so whilst you may have had a case against Iceland for the first Euro20k, when they reneged you would certainly have a legal case for that element v FSCS - admittedly that sounds like a protracted and painful process accompanied by much mud slinging by 300k individs and govt bods & charities. I suspect Gordon knew that eventually he'd have to pay, so he just 'did it' sooner and got some kudos for 'doing the right thing' - rather than later, with stuck mud.

Transalper

For those going away on holiday/working or leaving the UK there might be some light at the end of the tunnel regarding the ISA transfer.
The fact is you can open a new ISA but the application expires after 30 days if you have not put money in. I tried visiting my bank to try and seek help how I could pre open an ISA with nil balance. If you have used your years tax free allowance then it has to be nil or a transfer. I explained there will suddenly be a lot of money coming their way but the person I spoke to had no answers or in fact any knowledge of the Isesave fiasco. But now after calling the Halifax ISA helpline 0845 600 0169 they inform me that if it is a transfer alapplication (not opening with initial deposits) This 30 days does not apply and aparently can be done with a cash ISA as it is already common practice with stocks and shares type to take time to process. It should be the same with all banks (possibly)
They said to request an interview with my bank's financial advisor which I have arranged for Saturday. I hope this person has swatted up on the latest news:rolleyes:. The Halifax ISA is not the best rate (and I can always transfer at a later date) but that is where my compensation is going so sorting one with them seems to be the simplest way to do it for me as I'm going out of the UK before this is all sorted out fully.

briskly_2

briskly wrote: »

I've drawn up a spreadsheet to help sort out what to do with fixed term deposits. Assuming that:

A. The interest clock re-starts on the 8th October and interest accrual doesn't depend on when the FSCA get the forms back or process them

B. The interest rate is 6.7% APR (this this my original locked-in rate some might be slightly higher or lower)

C. The FSCA get the forms back by 6/12/08 and take 6 weeks to process the forms and get ready for payments (first payout likely on 17/1/08)

Calcs:

1. The gross loss of interest since 7 Oct on, for example, £35,000 is £336 if an electronic payout is requested and paid on 30/11 08.

2. Neutral point for fixed term deposits is 27/11/08 - for these accounts the loss of interest is same (around £320) whether the payment is electronic paid on 30/11/08 or by sending form and waiting until 17/1/09 for payment

3. For deposits maturing after this date, losses are reduced until, for deposits ending on 18/1/09 and after there is no loss of interest whatsoever - i.e. it is as if there had never been a problem




Hope this helps - lots of "ifs" still. please don't sue me if I've miscalulated!

Have just edited date typos - hope this is ok now!

qamwc1

The FSCS is not the last resort for the passport scheme - they are not there to cover failures of overseas compensation schemes. What the FSCS pay out is eventually paid for by other banks etc. It is the UK government that is paying out the first £16K (with you signing over you right to claim from Iceland) and the bit over £50K. (At moment the UK government is funding the whole lot but will charge interest on the the bit payable by the other banks etc. until it is repaid.) The FSCS is acting as agent for the bits it is not liable.

Paul_Herring

Ah - inconvenient truth, so you move the discussion elsewhere. We'll leave the fact that you ignored the salient parts of the FSCS website regarding interest and move on to ...

kenshaz wrote:

But the rules do not apply . ICESAVE where not part of the FSCS scheme.

Of course the rules apply. All this correcting is getting tiresome.

They were part of the FSCS scheme (Back in July '06). No-one would have even contemplated putting money in them if they weren't.

The pitfall however was they were only part of the 'passport' or 'top-up' scheme, and what wasn't made clear at the time was that the passport scheme meant that the foreign bank was wholly liable for the first part of any compensation and the FSCS for any remainder over and above what the foreign scheme promised. Notably, what wasn't pointed out is that if the foreign scheme couldn't pay out, the FSCS scheme wasn't obligated to fill that hole as well. Leaving to the rather silly situation where someone with (say) £16K wouldn't get a penny, and those with £17K would.

The payments are not compensation levied from member banks of the FSCS ,but it is being taken from a frozen pot.

What 'pot'? Do you seriously think that somewhere, sitting in some bank account, there is the money to fund this refund? And that it's earning interest at 6.2% or whatever? That if every customer of Icesave were to get their money into their linked accounts, and that they were to all simultaneously withdraw cold, hard cash from those accounts, that it wouldn't have an impact on the financial system?

I refer you to my earlier post where the tax payer is picking up <£16K and >£50K. The remainder should be coming from the FSCS.

Some of the tax payer's bit is probably coming from the seized assets (ohh - property's looking a bit grim at the moment - how long do you think it's going to take to sell that lot?) or from the loan the UK is giving Iceland, but there is no 'pot.'

You're clearly trying to troll this subject, and sadly I'm biting. I think this will be my last response to you on this thread.

Plasticman

kenshaz wrote: »

The situation is that the banks who are in FSCS scheme have not been levied to pay our monies ,the money is coming from frozen assets,not the compensation sheme . ICESAVE where not in the FSCS scheme ,therefore the terms of compensation do not apply.

That is where you are wrong. The money that was in our savings accounts has not been frozen - it has gone. What was frozen was Icesave assets in the UK. This included buildings etc, it isn't our cash. Your money disappeared when Icesave went bust and you will be compensated by the FSCS. They may then sell of Icesave assets seized to get the money back but at the moment they are only frozen so they have no leagal rights to do so.

Plasticman

And the terms of the FSCS DO apply as they compensate us for anything over and above the limits of the Icelandic scheme, up to £50K. In this instance the government have agreed to fund the Icelandic part (as Iceland can't afford to) and anything above £50K. They may then try to reclaim the money from the 'frozen' assets.

At the moment, the UK taxpayer is picking up the bill - for which I am very grateful.