MSE News: Savings protection rockets to £85,000

Former_MSE_Guy

This is the discussion thread for the following MSE News Story:

"A massive safety overhaul begins today with more protection for most but cuts for others. Here's what it means for you ..."

Read the full story:
Savings protection rockets to £85,000

Ken68

How can the Government underwrite a promise like that when the country is already bust.
Best to have left it as was. Canny savers will spread it around anyway.

Jonbvn

Ken68 wrote: »

How can the Government underwrite a promise like that when the country is already bust.

They are the government. They can just print more money.:money:

jamesd

The government is underwriting it, not paying for it. It's paid for by a levy on those in the financial services business. In the Icesave case the treasury temporarily lent the FSCS some of the money, which the FSCS then recovered from the levy.

wotsthat

Savings protection rockets to £85,000

Whoooooooosh!

Stompa

Ken68 wrote: »

How can the Government underwrite a promise like that when the country is already bust.
Best to have left it as was. Canny savers will spread it around anyway.

It was an EU directive, so presumably they had no choice.

agsnu

jamesd wrote: »

The government is underwriting it, not paying for it. It's paid for by a levy on those in the financial services business. In the Icesave case the treasury temporarily lent the FSCS some of the money, which the FSCS then recovered from the levy.

Recovered? It was still £20bn in the hole as at 31 March 2010 (last accounting reference point)... The overwhelming majority of that being B&B.

jamesd

Which it will recover from the levy.

I didn't check the current status when posting because the detail didn't matter, other than the FSCS part of payments not coming from the government, through taxes.

On 31 December 2008 the plan was three years of interest only payments before capital repayment starts and the "total amount of the FSCS's borrowings was, at 16 December, £19.7 billion, representing the amounts to fund the deposit book transfers for B&B, Heritable and KS&F, plus drawings to fund the compensation costs for the claims from KS&F non-Edge depositors, Icesave depositors, the direct Heritable compensation claims and London Scottish depositors".

£20 billion still owed implies that it's sticking to the plan so far and not raising the levy much on deposit takers while they are still working on repaying bailout loans.

cos69

Great to start the new year with some good news :beer:
(I know its been trailed for about year, but now its happened)

nrsql

Does this still include company accounts for small businesses?

juicyjude

Agree with you KenC. To say people with £85K in their bank accounts deserve to lose their money is just outrageous. Yes it is best to spread the money around but they certainly dont deserve to lose is!!!