joint a/c FSCS & source of funds

chriswhite_2

Hello,

Regarding the FSCS and the compensation limit on a joint a/c, does the source of the funds come into play when looking at the limit per person. In our case, I manage funds for both my wife and I, and am concerned that if I deposit £170K from a sole account in my name, they could argue only £85K is covered.

I have asked the FSCS, but have yet to received even an acknowledgement, let alone a response.

Thanks

Annisele

I don't know the answer, but I'd be astonished if the FSCS would pay £170k compensation for an account that was in only one name. If it did, then people would be claiming that the money was jointly held with AN Other, and the FSCS would spend all its time investigating those claims. Far easier to just say: one name on the account, £85k is max compensation.

The only thing I can find on the FSCS's website says:

The compensation limit of £85,000 applies to each depositor for the total of their deposits with an organisation, regardless of how many accounts they hold or whether they are a single or joint account holder. In the case of a joint account, FSCS will assume that the money in that account is split equally between account holders, unless evidence shows otherwise.

I think that if the FSCS did intend to make (in effect) double payments to single account holders, it would have said so in the above section of its website.

Safest thing would probably be to make your wife a joint account holder! That may have other implications though.

opinions4u

Compensation will be based on the title of the account.

One name in the title = £85k.
Two names = £170k.

Different rules may apply for trustee / nominee accounts (where typically it is the beneficiary who is covered).

jimjames

I don't think the source of the funds matters at all, the name(s) on the account would make the difference.

chriswhite_2

Thanks for the responses.

Annisele, to clarify the account is a joint account. I'm just funding it from a sole account.

My concern stems from the last part of the following quote from the FSCS web site:-

In the case of a joint account, FSCS will assume that the money in that account is split equally between account holders, unless evidence shows otherwise.

That seems to suggest that the source of the money can be relevant.

opinions4u, can I ask if you have this information on some authority?

Many thanks.

soulsaver

chriswhite wrote: »

Thanks for the responses.

Annisele, to clarify the account is a joint account. I'm just funding it from a sole account.

My concern stems from the last part of the following quote from the FSCS web site:-

In the case of a joint account, FSCS will assume that the money in that account is split equally between account holders, unless evidence shows otherwise.



That seems to suggest that the source of the money can be relevant.

opinions4u, can I ask if you have this information on some authority?

Many thanks.

It means that you would have to show evidence if you wanted compensation split other than 50% each.
Note I have seen that a bond provider has wanted funds for joint bond deposit paid from a joint account. And you may be asked to provide ID for both partners, in some cases, at branch.

Loughton_Monkey

I similarly manage all our funds. Money 'changes hands' between myself an my wife constantly, depending upon circumstances, tax, FSCS rules, etc.

My understanding would be that (as said above) a joint account containing £170K would simply and practically be covered. Just as a minor detail, I 'suspect' that FSCS would give each of you a cheque for £85K.

But your question does raise some interesting thoughts. It would be quite clear (to FSCS) that the joint account had been funded, say, with a transfer from your wife's account of £1,000 and another transfer of £169K from an account in your name. But if they tried to 'limit' compensation to £1,000 and £85K respectively, I'm sure there would be a 'defense'. This is because it is well understood that a joint account is 'owned' 50/50 by the two names from a legal point of view.

soulsaver

Where it becomes crucial is say you had £50k an ac in your own name & a £100k jt ac.
If compensation was shared 50/50 you'd lose £15k.
Now I seem to remember reading somewhere that if you could prove that £35k was truly yours in the jt ac & £65k was clearly the partners, you could/would both be fully compensated?

chriswhite_2

Thank you all for the responses. It does sound like something I don't need to be concerned about.

I will post any response I receive from the FSCS.

Thanks,

-Chris

soulsaver

chriswhite wrote: »

I will post any response I receive from the FSCS.

Thanks,

-Chris

That'd be good, thanks.

Reaper

The tax man will tax the account as if you both own it, so the FSCS would be on weak ground trying to treat it as anything other than a joint account.

In effect you have partly gifted the money to your wife, which is a perfectly legal thing to do.