FSCS Compensation: Your Questions Please

LesU

For those of us with multiple accounts. Will these be paid separately into the linked account or will there just be one big lump sum?

edda

Will the compensation that is paid be partly savings and partly interest earned up to the date of failure? If so, will any interest be paid nett of basic tax?

How will people who have to fill in self assessment forms record this next year? Will the FSCS issue a paper trail for evidence to HMRC?

MM46

I assume tax will be deducted from any interest on savings accounts except for ISAs Will we have to request a tax certificate or will they issue them automatically?

ahgee2

Dear Martin,

Could you please check that the FSCS intend to honour their guarantee
that

"Fixed term accounts will be paid at the maturity date with the
interest that would have been paid by the bank at maturity date."

at least for accounts below the 50K threshold. Those above 50K have
no right to demand this, and those relying on monthly interest should
have the option to terminate their fixed rate bonds early.

But many of us took out these fixed rate bonds, below 50K, with a
guarantee (from Icesave and the FSCS) that the interest would be paid
in full, at the fixed rate, up to the date of maturity, and I do not
see on what grounds that guarantee can now be broken. In particular, I
do not understand why you say "most likely they are gone, as this is a
compensation payout not a reinstatement of an account".

justaquickie

Assuming the FSCS fixed rate bond terms are honoured, and the bonds live on to maturity - see ahgee2's post #15 (media reports of FSCS conversations now seem to suggest this is likely) ....

Will consideration be given should the new 'home' for these accounts be a bank/BS where the saver has existing savings and subsequently becomes exposed above the £50,000 FSCS compensation limit by virtue of the transfer?

Note: This might be accommodated by offering an optional break clause on the bond, or providing a temporary increase of the FSCS guarantee limit for the remaining duration of the term (should lightning strike twice).

Thank you.

hra_2

The online nature of the FSCS compensation could present an obvious opportunity for mass phishing scams. Is the FSCS taking steps to guard and warn about this and provide advice for anyone coming across such a scam including how to report it?

ed123_2

.....Given that fixed termers will have the option of letting the term run ( as per Moneybox statement), we would need a guarantee that we would be able to withdraw the money in one/two etc years time. I feel this could not be given unless the accounts were taken over by a named bank/building society. ie a "holding" insititution as outlined in the new banking bill. It would seem that Newcastle building society the current administrators of Icesave would fit the bill. However if this guarantee was not given I feel that I & many fixed termers would not leave the money in Icesave.

dali21

I opened an instant acess account in Feb 2007 and last received interest in Feb 2008. On 5th October, I asked to close the account and transfer the balance with interest accrued and this was to occur the next working day i.e. Monday 6th account. Well the account was closed but the funds did not arrive in my nominated account but reappeared back in Icesave on 9th October. However, because I'd closed the a/c, this was shown as a new account opened with the balance (without interest) on 9th October.

My question then is: will I received the accrued interest from Feb 2008 to 6th October 2008 or will this now be treated as if I had just opened the account on 9th October?

To be honest, I will be relieved to get back my original capital so any interest would be a welcome bonus.

Mowerman

Even once it was clear that there were potential problems with Icesave I was very reluctant to close my ISA as I did not want to lose the tax-free status. However late on 5 October I could see that collapse was inevitable and did take action to withdraw almost all that money using CHAPS, which came through successfully on 6 October. Can that money be added back to the residue in the account when creating a new ISA?

Transalper

I'm still unclear when we will get the first contact from FSCS and how. It could be crucial to me to know to the day as I'm off backpacking on 13th Nov for 5 months to places on the globe that don't have telephones let alone internet. If some places have internet cafes they are just not secure,( keyloggers and wifi bandits)Will I have to get power of attorney sorted out for someone to sort my compensation out? How can I make sure the ISA account deposits go into another?
Basicaly what do I do if I am not here to sort things personaly and how can I prevent any MORE loss of interest