How safe is an AA savings account if the Euro goes?

fuddyduddy12

I have some money (quite a bit) saved in an AA internet savings account which was offering the best savings rate at the time. I have just had a look online and it seems the AA is owned by Lloyds Bank. How safe is this? I know Lloyds are not doing that well as it is and if the Euro goes tits up, is this likely to be one of the first banks to go under? Would it be sensible to move my money out of there (the interest rate is about 2.8% which isn't loads anyway)? How can I find out which banks would have problems in the event of the Euro collapsing?

atush

Whey would the bank go under, if it wasn't allowed to go under last time? And what is your current interest rate?

Is the money more than 85K? I f so, move some of it.

meatandtwoveg

If Lloyds goes under, and the goverment has to PRINT to pay up the £85k guarantee, i would say anything over the £85k you have in your account wil be the least of your worries, food, warmth and safety would be my prime concerns......

MoneySaverLog

I thought the AA was covered by HBOS not Lloyds for the £85K guarantee. HBOS and Lloyds have seperate guarantees as far as I am aware.

Ark_Welder

Lloyds Banking Group plc is the holding company that is quoted on the stock exchange. Within this group there are separate authorised institutions, and within each institution there is one or more banking brands.

'HBOS' as an institution is called Bank of Scotland plc and within BoS there is Halifax, The AA and Bank of Scotland, amongst others. There is also an institution called Lloyds TSB Bank plc, which covers brands Cheltenham & Gloucester (for now...) and Lloyds TSB Group.

So if 'Lloyds' were allowed to go under, both 'Lloyds' and 'HBOS' would too. Remember that HMG still owns 41% of the quoted holding company. More likely is that LBG would create more shares via a rights issue to recapitalise, and that HMG would end up buying the majority of them - as it has done so previously.

[Edit] A rights issue might occur after the ECNs had converted into ordinary shares, though.



http://www.fsa.gov.uk/Pages/consumerinformation/uk_groups/index.shtml

financial_illiterate

Ark_Welder wrote: »

So if 'Lloyds' were allowed to go under, both 'Lloyds' and 'HBOS' would too.

Yes, but as seperate institutions within the Group, they have seperate FSCS limits of £85k per person? So if you had £85k with Lloyds, and £85k with HBOS, you'd have £170k protected in the event of LBG going under (which isn't going to happen anyway!)?

Ark_Welder

financial_illiterate wrote: »

Yes, but as seperate institutions within the Group, they have seperate FSCS limits of £85k per person? So if you had £85k with Lloyds, and £85k with HBOS, you'd have £170k protected in the event of LBG going under (which isn't going to happen anyway!)?

Correct on both counts. I was just trying to show that as far as 'going under' was concerned, if 'Lloyds' were to do so then so would 'HBOS'.

meggsy

The deposit taker for AA savings is Birmingham Midshires.

oldvicar

I've just happily made deposits (under £85K) with BM savings (new name for Birmingham Midshires, part of HBOS). I did so believing, because of points above, that in the event of trouble they would be rescued again or at least be one of the last to go under.

So I'd suggest that OP should not worry unduly.

Even if LLoyds group (or any other bank) were one of the first to fail in the event of further banking collapses (and I don't believe they will be) then that is not such a bad place to be. The FSCS will pay out for the first ones to fail. Its the ones that collapse in the second round, under the weight of FSCS levies for rescuing those which fail first, I would worry about.

MoneySaverLog

oldvicar wrote: »

The FSCS will pay out for the first ones to fail. Its the ones that collapse in the second round, under the weight of FSCS levies for rescuing those which fail first, I would worry about.

They will all be protected for the full £85K. All that would happen is that the pound would be devalued. So your £85K would be worth a few hundred quid in real terms if that were ever to happen.

oldvicar

MoneySaverLog wrote: »

They will all be protected for the full £85K. All that would happen is that the pound would be devalued. So your £85K would be worth a few hundred quid in real terms if that were ever to happen.

That would be madness