The One Account - does RBS nationalisation= us losing our savings??

linzy_p

Hi guys

I've trawled around but just can't seem to find the answer, and am loathe to call them as I'm not sure I'll believe what they say - such is life at the moment! :eek:

So, we currently have approx 10k of savings in our RBS-owned One Account, off-setting the mortgage, and I'm concerenced that if the bank goes t*ts up, the cash we have sitting there will be swallowed up to reduce our mortgage debt.

I'm not the most money-savvy chick around, but is this a likelihood? I'm thinking of getting out of this mortgage and getting a "normal" one and putting the savings somewhere less risky...if I can find anywhere!!

Thoughts most welcome...

L x

Radiantsoul

I wouldn't have thought so.

Nationalisation would wip up shareholders not savers.

linzy_p

Are you sure??

I just seem to remember reading somewhere that when another company/governement, whatever, take over a bank's debts (i.e mortgages) this kind of off-set/current account mortgage is bought at it's actual value.

So for example, if I have a £100k mortgage now, with my £10k savings, it's effectively only a debt of £90k, so that's what the new company would buy, thus hoovering up my 10k.

I just wonder how likely this is?? Sorry for being so dumb amongst such money-savvy people, but thought it was my best chance of getting some answers I could trust!!:rotfl:

L x

maninthestreet

The whole point of nationalising a bank is to prevent them from going bust - so your savings would be save.

silvercar

If the company is taken over, the new company has to keep to the existing terms and conditions.

If a company goes bust and is sold off or assets stripped down and sold, then you could find that your asset is the mortgage less the savings. In this case nothing will change for lenders or savers, only share holders are directly effected.

rl290

Nationalisation is done to make sure your savings are completely safe.. assuming the government doesn't go bankrupt. At that stage we should probably leave for France. Last one out....

tyllwyd

We used to have a One account but don't any more - but purely in my own personal opinion I think that it is entirely possible that if the bank got nationalised they would decide that your mortgage was the amount outstanding and they wouldn't regard you as having separate savings, so you wouldn't lose your savings exactly but it would be tied up as equity in your house.

I don't know if there is anything in the original terms and conditions of the mortgage which would stop that happening, but if it is important to you to have easy access to that money, I think you should make your plans assuming that it might happen.

linzy_p

tyllwyd wrote: »

We used to have a One account but don't any more - but purely in my own personal opinion I think that it is entirely possible that if the bank got nationalised they would decide that your mortgage was the amount outstanding and they wouldn't regard you as having separate savings, so you wouldn't lose your savings exactly but it would be tied up as equity in your house.

I don't know if there is anything in the original terms and conditions of the mortgage which would stop that happening, but if it is important to you to have easy access to that money, I think you should make your plans assuming that it might happen.

Hmmm, this is what I'm afraid of. Having the cash tied up in the house's equity isn't going to pay mine and my husband's tax bill.:mad: Only problem is, if we whip out the money today, it obviously has the adverse affect of reducing our overpayments (we over pay by approx. £200 every month currently.)

Can I ask why you moved from the One Account if that isn't too nosey??

tyllwyd

We moved the mortgage because we found that it was too difficult to keep track of where we were, because every month the interest payment was different and the figure we were heading for was different, so it was very easy to overspend without even realising it - if we had been more organised, we could have set up our own spreadsheet to work it all out, but in the end we decided it wasn't working for us. Also, we went from a situation where we could overpay, to being a bit short of money (with a new baby!), so we'd lost the main advantage of the account.

I would be careful about keeping your tax bill money in the mortgage. Earlier last year, I remember reading in the press about a couple who had overpaid their flexible mortgage using the savings they were keeping for the tax bill, only to find that the mortgage company (can't remember who it was) wrote to them to say that they had revalued the house downwards, and to keep to the maximum LTV allowed they couldn't take the money out again. I think they managed to get them to change their minds, but be warned that it has happened to people!

linzy_p

Yikes - thanks for that!! It's always been sold to us that it's our own separate money that we can use as we wish, but until we do, it's working for the mortgage.

Methinks it's time to call The One Account - just can't risk losing our savings, as that is what we will always regard them as, even if the mortgage company doesn't!

Did you stick with a similar product or just go with a more conventional product in the end?

tyllwyd

Well, by that point we had no savings at all, so it wasn't worth us paying a slightly higher interest rate to get the benefit of an offset mortgage!

Yes, the One account always did sell itself on your savings always being available - but then again, they also made a big deal of the fact that their rate had always tracked the BOE rate, and look what happened there! To me, it seems like with everything that's gone on, they feel free to tear up the rulebook ... and especially if the government get involved, I wouldn't trust them at all to do anything just because that's how it always had been done before.