Building Societies - are they safe?

Former_MSE_Guy
Former_MSE_Guy Posts: 1,650 Forumite
I've been Money Tipped! Newshound! Chutzpah Haggler
edited 6 April 2010 at 5:49PM in Savings & investments
This thread is to discuss the following news story:
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  • azureblue_2
    azureblue_2 Posts: 308 Forumite
    Ooooh er missis. What do we do now? Is it time to panic, pull the cash, stuff it in the mattress? Or is this more financial malarkey to get us lemmings on the run?
    :hello:
  • Paul_Herring
    Paul_Herring Posts: 7,481 Forumite
    Name Dropper Photogenic First Post First Anniversary
    azureblue wrote: »
    Ooooh er missis. What do we do now? Is it time to panic, pull the cash, stuff it in the mattress?
    Credit unions? Or perhaps not.
    Conjugating the verb 'to be":
    -o I am humble -o You are attention seeking -o She is Nadine Dorries
  • D1zzy
    D1zzy Posts: 1,500 Forumite
    Just keep below 50K and as long as the country doesn't go bust .................(hopefully there will be some advance warning of that!)
  • azureblue_2
    azureblue_2 Posts: 308 Forumite
    If you have £50,001 in an account and the institution hits demise, will FSC pay the £50K so you only lose £1?
    :hello:
  • StevieJ
    StevieJ Posts: 20,174 Forumite
    First Anniversary First Post Combo Breaker
    azureblue wrote: »
    If you have £50,001 in an account and the institution hits demise, will FSC pay the £50K so you only lose £1?

    Yup, the first 50k is protected.
    'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher
  • D1zzy
    D1zzy Posts: 1,500 Forumite
    azureblue wrote: »
    If you have £50,001 in an account and the institution hits demise, will FSC pay the £50K so you only lose £1?
    + potentially any interest accrued
  • Baldur
    Baldur Posts: 6,565 Forumite
    D1zzy wrote: »
    + potentially any interest accrued
    Do you have a link to sustantiate that statement?

    The FSCS indicates £50,000 as the total maximum level of compensation, not £50,000 excluding interest - http://www.fscs.org.uk/consumer/key_facts/limitations_of_the_scheme/compensation_limits/

    The maximum levels of compensation are:


    Deposits: £50,000 per person (for claims against firms declared in default from 7 October 2008).
  • baby_boomer
    baby_boomer Posts: 3,880 Forumite
    First Post First Anniversary Combo Breaker
    edited 17 April 2009 at 6:25PM
    We won't get the truth from the current batch of directors - at least not in this year's accounts.

    It will be interesting to compare the West Brom BS's results for the year to end March 2009 with their confident statement half-way through that financial year.
    The West Brom continues to perform strongly through the current, unprecedented economic times. As the UK’s seventh biggest building society, the West Brom is a successful and profitable business, generating tangible benefits for its 530,000 members.
    This statement was made the day before the announcement that the Chief Executive was standing down ;). If West Brom does have to be bailed out, it is worth considering that it is x3 the size of Dunfermline and that one ratings agency had warned Nationwide that if it bails out any more BSs it would be downgraded.

    All BS directors have to watch their backs since their increased salaries and bonuses over the last decade have come on the back of the very same diversification policies [into buy-to-let / self-certification / commercial property / Icelandic banks / buying dodgy loan books to boost the assets ] that are hitting the societies so hard.

    Your £50K is safe - guaranteed by the government - but what are the interest rates going to be like as these societies try to repair the damage over the next five years?

    Another problem with the £50K protection, necessary as it is, is that it will delay the process of a flight of savers money to the stronger societies and a weeding out of the weak.

    The article is a case in point. Martin Lewis is effectively directing savers towards the West Brom with its new top 4.3% rate - and why not since the government will bail it out if it has to?
  • D1zzy
    D1zzy Posts: 1,500 Forumite
    Baldur wrote: »
    Do you have a link to sustantiate that statement?

    The FSCS indicates £50,000 as the total maximum level of compensation, not £50,000 excluding interest - http://www.fscs.org.uk/consumer/key_facts/limitations_of_the_scheme/compensation_limits/

    Sorry for not being clear -that's what I meant you lose £1 + any accrued interest
  • fullstop
    fullstop Posts: 545 Forumite
    Vince Cable on the case again re: FSA

    http://news.bbc.co.uk/1/hi/business/8003773.stm
    "When the Government borrows, the citizen has to save".

    Machiavellii
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