Offset mortgage - all eggs in one basket?

snowie_3

I have an offset mortgage with IF (which is part of BOS isn't it?)
I was about to move my savings into my offset account so that I pay less interest every month. I know that my savings are guaranteed (up to a higher amount now) but I'm worried that if anything happens to IF, then all my savings will be swallowed up, as the guarantee offered by the government is on the net value you have with the bank. Obviously I'll be left with less debt, but I like the idea of being able to use my savings how I want to rather than them being taken. Offset was a great idea before "all this banks going under gubbins"... but now I'm worried about putting all my eggs in one basket! I need to keep some money aside in case I get made redundant etc.
If something happens to IF, is it true that they'll take my savings and just reduce the debt? What's the likelihood of this happening given that they're mostly owned by the taxpayer (85% now isn't it for BOS)? Is the risk worth taking to reduce my monthly interest payments by about £100?

reassurance welcome!

opinions4u

snowie wrote: »

I have an offset mortgage with IF (which is part of BOS isn't it?)

It is a subsidiary of HBOS which is now owned by the Lloyds Banking Group. Your FSCS protection comes under the Bank of Scotland banking licence.

I was about to move my savings into my offset account so that I pay less interest every month.

A logical move. It also removes your savings from tax as well.

I know that my savings are guaranteed (up to a higher amount now) but I'm worried that if anything happens to IF, then all my savings will be swallowed up, as the guarantee offered by the government is on the net value you have with the bank.

Lloyds Banking Group is 43% government owned. If they allowed their own bank to go tits up, then the nation is in a far more serious position than worrying about our savings. Buying a spade (to dig a trench) and a decent hunting rifle may be more appropriate.

Obviously I'll be left with less debt, but I like the idea of being able to use my savings how I want to rather than them being taken. Offset was a great idea before "all this banks going under gubbins"... but now I'm worried about putting all my eggs in one basket!

I think the statement above says it all. Perhaps retain a decent rate ISA elsewhere that allows you access in the case of a real crisis.

I need to keep some money aside in case I get made redundant etc.
If something happens to IF, is it true that they'll take my savings and just reduce the debt?

Yes, but something won't happen.

What's the likelihood of this happening given that they're mostly owned by the taxpayer (85% now isn't it for BOS)?

43% for the Lloyds Banking Group. Their shareprice may be wobbly. The may be completely nationalsied (though I doubt it) but you will not need to see a claim on the FSCS.

Is the risk worth taking to reduce my monthly interest payments by about £100?

Absolutely the right thing to do. Go for it.