Lloyds/HBOS savings.

aggieboy_2

Hello all. New poster, but long time lurker, who now needs advice.

In a nutshell, after sitting out the last years problems with my savings(£600,000) locked in at 6.55% I have recently reinvested them. I (like others on here) have taken advantage of having a Halifax reward account paying 6.25% fixed until June, and that's where I've invested it for now.

Having regards the £50,000 gaurantee and troubles at Lloyds, I'm taking the view,(as I did during the last year when it was invested with BoS Int), that the Govt' can't afford to let any bank go under and am thinking of leaving it there. I'm well aware that nobody can read the future but am I completely mad and taking an enormous risk in doing so? Any advice/comments welcome.

gozomark

you are taking on a small risk - I'd say less than 1% chance of going wrong

sheslookinhot

With that amount saved, it would be folly to ignore all advice to spread your savings across different savings banks. There is absolutely no guarantees that can be relied upon. Who could have imagined the financial climate that now prevails, only 6 months ago. Spread the risk will minimize the risk.

EalingSaver

aggieboy, I'm not sure whether I take your post seriously. Apologies if it is serious, but if so I think you are completely off your rocker in having it all in one place.

its not hte risk level that's the issue, its the hazard: the combination of the level of risk and the outcome if that risk was to crystallise.

if £600k represents all your savings, then having it all in one place - unless its with an already government owned outfit - is mad. I'm not in your position, but do have cash savings of around £300k. I have it spread around to keep it under UK protected limits; even where it is protected to higher level by e.g. EU/Dutch/Irish schemes.

If we went back about 16/18 months ago I had all my cash savings in one bank. Given what was happening in the world I started gradually drawing that down and spreading it. Thank god I did. The bank I had it with was IceSave. OK, so savers then did get all their cash back, but only after a very nasty period of worrying whether they would. And that was then.

OK with Lloyds Banking group being who it is and the govt as a major shareholder your risks are low, but I for one would spread that risk and sharpish. I wouldn't be able to sleep at night I'm afraid.

P.S. I did break my own rules with HBOS as I had about £60k with combination of Midshires and HBOS, but as soon as a fixed term expired a couple of weeks ago I got it back down again.

aggieboy_2

I thought someone might be sceptical! It's a genuine post though and thank you for replies.
My thinking is that if the Govt' allowed a bank to 'go under' it would be a catastrophe and cause panic. There is also the point the they pushed and allowed this merger and would face massive criticism if it were to fail.

I suppose what I should ask is whether anyone can see anything happening other than a 'worse case scenario' of nationalisation given the Govts' actions so far?

gozomark

if you were able to live several times through this situation, I'd say the risk at <1% is acceptable, in fact its very attractive odds. However, you are only alive once, so how will you cope if the <1% chance came up ?

you are taking a very small risk, but with potentially catastrophic personal implications if it went wrong

soulsaver

Are there withdrawal limits in the halifax reward saver accounts? You can have 4 pa penalty free with mine so you do get a chance to get money out if the unthinkable should occur... but can you get, say, £600k out in a normal day?

oldfella

I have the 6.5% account until august, and I have limited it to 50K.

the risk of loosing everything over that, even if small, is just not worth taking

Nick_C

I'm puzzled why you would have so much of your assets in cash. if this is purely a savings pot and you are not between properties, I would have thought you should be spreading it more widely and getting a properly balanced portfolio.

With this amount of cash, you really should be talking to an IFA.

Dunstoh will doubtless be along shortly to second this!

gozomark

by balanced, that would mean higher risk, given its cash now. If the OP has enough to live on, why take more risk ?

456789

The government wouldn't allows Lloyds to fail if it could stop it - but if things got bad and it couldn't stop it from failing then you would have a big problem