Post Office Growth Bonds

retirementherewecome

I wonder if someone can help me get to the bottom of this?
Two months ago, my mother invested £40,000 in a growth bond with the Post Office. The actual bank her money is invested in is Bank of Ireland. Is her money safe? If it isn't should we just cut our losses and withdraw it now?

Sceptic001

To avoid unnecessary repetition, look at the almost identical thread here:
https://forums.moneysavingexpert.com/discussion/2761692

retirementherewecome

Thanks for your help, but the trouble is I'm finding the information very conflicting. I know Bank of Ireland aren't in difficulty yet, but would they be covered by the £50,000 rule if they were?

dunstonh

Arrrgh. My pet hate product.

How do they get away calling it that when the product is neither a bond or has growth!

I know the post office like to dumb down (they were one of the earliest to start referring life assurance as life insurance) but it just complicates matters.

Sceptic001

In a nutshell, until 1st November deposits are covered by the Irish scheme (limit 100k euros).
After 1st November deposits will be covered by the UK FSCS (limit £50k, rising to the sterling equivalent of 100k euros on 1st Jan 2011)

retirementherewecome

I think my mother considered it to be relatively safe, but is it really?

dunstonh

Its safe enough with £40k in it.

retirementherewecome

So even with the Irish government covering the loss, it would be safe?

Also, the cutover date of November 1st - would my mothers bond be covered by the UK regulator after 1st Novemebr or still covered by the Irish govt?

Reaper

After the 1st November the UK will take over covering her.

Until then the Irish government covers her. In my opinion you can rest easy because even if the unthinkable happened and the bank failed and the Irish failed to cover it I am sure the UK would step in for UK savers. The reason being there is a precedent where the UK stepped in for savers who knowingly used Icelandic bank IceSave so it is unthinkable they would fail to do the same for people who did not realise saving with a solid UK institution like the Post Office did not actually mean they were protected by the UK.