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

tyllwyd

dfitps wrote: »

Shouldn't customers be glad it's dealt with this way (although I can see it could be inconvenient)? If the mortgage and savings parts were considered separately and a bank went bust (not nationalised) and couldn't pay savers, you'd only get savings back up to the FCSC (or whatever it's called) limit. Imagine if you had a 100K mortgage and 80K of 'savings' in there - net balance -20K. Suppose the 80K was kept separate and the bank went bust - 50K protected, 30K lost. But the mortgage would still be at 100K. End result -50K instead of the -20K it ought to be. So it's safer this way round I think - I'd rather risk losing a right to borrow than risk losing actual money!

I didn't think it worked that way - I thought the Government's 50K guarantee only applied to your net savings with the bank. So if you had 100K borrowed and 80K saved, they would say you had -£20K with the bank in either situation.

tyllwyd

spence wrote: »

My advice is to chill out, them saying you've overpayed and can't have your money is the same as your salary going in on the 1st of the month and then being told you can't spend it because it's an "overpayment", its just not going to happen.

No it's not like that - it's like having a flexible loan of more than your salary, having your salary going in and then being told that they'd changed the terms of your loan so that your salary had gone towards paying off your loan and they weren't going to let you increase the loan again by that amount.

dfitps

tyllwyd wrote: »

I didn't think it worked that way - I thought the Government's 50K guarantee only applied to your net savings with the bank. So if you had 100K borrowed and 80K saved, they would say you had -£20K with the bank in either situation.

That's what I'm saying - people should be glad it is considered net, even though the disadvantage of that could be that in the case of nationalisation it being considered net leaves you with no liquid cash, just the -20K - you can't take anything out. So although that might be a difficulty with nationalisation, when the money is safe but the rules possibly change so you can't get it out (i.e. borrow it back), it's much better in the case of a bank going bust. If the savings and mortgage were always considered separately then that would be riskier if the bank went bust.

If I had an offset mortgage with linked rather than a single account I'd want to double check though - I'm sure I read somewhere last year that some kinds of mortgages might not look at net savings/liabilities but you could lose savings while keeping the mortgage, if the bank/building society went bust.

tyllwyd

dfitps wrote: »

That's what I'm saying - people should be glad it is considered net, even though the disadvantage of that could be that in the case of nationalisation it being considered net leaves you with no liquid cash, just the -20K - you can't take anything out.

But that is exactly what the OP was worried about! She needs her savings to pay a future tax bill, and surely, if she had her savings with one bank and her mortgage with a different one, she wouldn't need to worry about a potential situation where she loses access to the cash when she needs it. So - just in my personal opinion - if she thinks that situation is at all possible, the One account isn't the best place for her savings.

linzy_p

spence wrote: »

My advice is to chill out, them saying you've overpayed and can't have your money is the same as your salary going in on the 1st of the month and then being told you can't spend it because it's an "overpayment", its just not going to happen.

Couldn't disagree more actually - and I heard it from the horse's mouth yesterday! In the current times, it is certainly not beyond the realms of possibility, and I can't afford to chill out and lose the 10k to house equity.

tyllwyd

[and just because I'm in a debating kind of a mood today ...]

... and I don't think that the £50K limit compensation is the most likely problem. What if the RBS decided that they are going to discontinue the One account, and wrote to all their customers saying that their mortgages had been changed to standard RBS mortgages with whatever balance was outstanding at that date. Or that they had revalued all the properties downwards, and changing everyone's plans (which is the theoretical mortgage element of a One account) so that you were now on the new plan rather than ahead of plan and giving you a borrowing facility of zero. In either case, neither of which seem very far-fetched to me, your money would get swallowed up into your mortgage.

dfitps

tyllwyd wrote: »

But that is exactly what the OP was worried about! She needs her savings to pay a future tax bill, and surely, if she had her savings with one bank and her mortgage with a different one, she wouldn't need to worry about a potential situation where she loses access to the cash when she needs it. So - just in my personal opinion - if she thinks that situation is at all possible, the One account isn't the best place for her savings.

Aargh, we're going round in circles! I know that's what the OP was worried about, and yes she should move if that's not what she wants. I was just pointing out that the silver lining to that set-up is that, in the case of a bank going bust, you don't lose actual money. So although it might seem a pain and force some people to move accounts if liquidity is the most important thing for them, it's still not a bad thing for the net value of mortgage and savings together to be worked out rather than them being treated as completely separate.

silvercar

tyllwyd wrote: »

[and just because I'm in a debating kind of a mood today ...]

... and I don't think that the £50K limit compensation is the most likely problem. What if the RBS decided that they are going to discontinue the One account, and wrote to all their customers saying that their mortgages had been changed to standard RBS mortgages with whatever balance was outstanding at that date. Or that they had revalued all the properties downwards, and changing everyone's plans (which is the theoretical mortgage element of a One account) so that you were now on the new plan rather than ahead of plan and giving you a borrowing facility of zero. In either case, neither of which seem very far-fetched to me, your money would get swallowed up into your mortgage.

They can not offer the oneaccount to new customers. WHether they can change existing terms and conditions for existing customers is a different matter. Even if they felt they could impose conditions they would have to bank on some term somewhere that gives them the right to change things in strange circumstances and, I would suggest, give people notice.

silvercar

dfitps wrote: »

Shouldn't customers be glad it's dealt with this way (although I can see it could be inconvenient)? If the mortgage and savings parts were considered separately and a bank went bust (not nationalised) and couldn't pay savers, you'd only get savings back up to the FCSC (or whatever it's called) limit. Imagine if you had a 100K mortgage and 80K of 'savings' in there - net balance -20K. Suppose the 80K was kept separate and the bank went bust - 50K protected, 30K lost. But the mortgage would still be at 100K. End result -50K instead of the -20K it ought to be. So it's safer this way round I think - I'd rather risk losing a right to borrow than risk losing actual money!

Banks and some building societies supposedly consider the net balance. Some smaller building societies do consider it as two separate accounts, so there is the real risk (in as much as the government not fully compensating) that mortgage savings could be lost.

Do remember that, even when banks hit trouble, the government has always stepped in and safeguarded ALL savings. Building societies are more likely to be taken over than fall into administration.

BaobabAmy

I have a One Account mortgage and £25,000 of "savings/overpayments/whatever they call it" in there. Am happy to leave it there as if it all went tits up, luckily I'm in a position where I could just start from scratch and build up my savings again from my income - I don't need the money for a tax bill or whatever. I dont feel I'd actually be loosing money - I'd just owe less on my mortgage. I can't be bothered with the hassle of moving bank accounts again.