Consumer Power: Have your say on savings safety

Former_MSE_Wendy

[title=http://images2.moneysavingexpert.com/images/dp/wtd_underline.gif]What this is all about[/title]
The CEO of the Financial Services Compensation Scheme, Mark Neale, has agreed to be interviewed by MSE with questions from MoneySavers. Let us know what you'd like us to ask.

What concerns do you have about the scheme?
Are you unsure of how the limits are supposed to work or which banks are linked?

Related Guide: Full MSE Guide to Are Your Savings Safe?

[title=http://images2.moneysavingexpert.com/images/dp/wtd_underline.gif]How to have your say[/title]

Post your question below and we'll pick the best to ask

For details of other ways to have your say see the Consumer Power! guide.

juicyjude

Yes 2 questions really Wendy. The first one is is the 100,000 euro comp figure definately going to come into force on the 31st December 2010 and two if you have a saving bond with a provider and they then merge with another one will legislation allow customers to withdraw the money if they so wish for safety.

Reaper

Do you feel the FSCS funding is fairly distributed? eg the amount IFAs pay compared to the banks

alanq

What became of the proposal to provide additional protection for large sums (such as the proceeds of a house sale) for a short period to allow time for the funds to be distributed among multiple institutions?

juicyjude's point is an important one. In the event of mergers either additional protection is required for pre-existing fixed term bonds or penalty-free withdrawals of funds in excess of the compensation limit should be allowed.

Old_Wrinkly

When will the conversion of 100,000 euros to its sterling equivalent be decided upon?
On what basis?
Who by?
And how often will it be amended as currency values fluctuate?

juicyjude

Oh well that will give Mark Neale a few things to chew on! :money::money:

gt94sss2

If the compensation schemes continue to get more and more generous - what incentive is there for financial institutions to offer competitive rates for savers? As scheme limits increase, the extra increase benefits fewer and fewer savers..

Are there any plans to make the FSCS funded in advance rather than PAYG? If so, won't that put a strain on institutions while they try and rebuild their capital ratios.

Are there any plans to change/increase the compensation limit for investments/shareholdings rather than just for cash deposits.

Regards
Sunil

chris1

Please ask for clarification on cash held within a platform.

For example, the HL SIPP allows cash to be held. From time to time they offer fixed term/rate deals, with certain banks.

1. When the cash is in a fixed term deposit with Bank A, does this form part of the individual's compensation limit for Bank A (e.g. £50K total) or is the whole amount (all HL's customers together) treated as one deposit and therefore not covered?

2. When the cash is held directly by HL (say in between fixed rate/term offers, or pending investment in something else) what cover, if any, is provided? (HL are unable to state with which bank the money is held).

Similarly ISA platforms may hold cash for several months, and again are unable to confirm the bank(s) used.

In the case of a SIPP shortly before the purchase of an annuity there could be a greal deal of cash in there, representing someone's entire pension savings for life. Are there any plans to increase cover at this time?

Thanks

passinghamt

I have tried in vain to understand the complete set of rules for SIPPs (or indeed other non-trivial investments). What happens for failures at any of the different levels?

• The company providing the SIPP
• Companies managing funds in the SIPP (where a different fund manager)
• and the underlying investments in such funds
• and if the investment is cash, does the £50K level apply instead of the £48K level?

alanq

gt94sss2 wrote: »

If the compensation schemes continue to get more and more generous - what incentive is there for financial institutions to offer competitive rates for savers?

I don't understand this point unless you are saying that financial institutions currently have to offer higher rates to attract deposits over £50,000.

The increased compensation limit may increase competition because more money will be drawn to accounts offering higher rates whereas at present people choose to leave some of their funds earning less attractive rates in order not to exceed the limit.

joerugby

The scheme should cover EUR100,000 per brand, not per institution. The banks should be prepared to cough up for the cost of this as it is they who benefit from multiple brands per institution