Preparedness for when

nuatha

moneyistooshorttomention wrote: »

Well...an Idiots Guide to what exactly are considered to be "bank accounts" at risk of "bail-in" (aka theft by another name - only undertaken by the Government) would be useful.

This sounds like a daft question, but when we talk about "bank accounts" - do we mean "bank banks" iyswim (ie Barclays, NatWest, Co-op) or are we including "bank style accounts" held with building societies (eg Nationwide Building Society, etc).

I'd assume that Friendly Societies and Credit Unions are less likely to be hit, other than that I would assume anything else is likely to be considered a bank account. I would be particularly concerned if I had a offset mortgage bank account.

As to where the line may be drawn, it will be drawn where it suits the government, given the general attitude of this government I would expect the bar to be set low in order that the wealthy are penalised less than they would otherwise be.

moneyistooshorttomention

Assuming the net might get spread wide - then the subsidiary question would be "Would the Government lump together everything they considered to be held in a bank account across however-many-places someone was holding their money?" for the purposes of deciding how much they could steal by taking x% from someone?

On the other hand - would they steal that percentage per bank account/anything else they had decided to deem to be a bank account?

GreyQueen

moneyistooshorttomention wrote: »

Assuming the net might get spread wide - then the subsidiary question would be "Would the Government lump together everything they considered to be held in a bank account across however-many-places someone was holding their money?" for the purposes of deciding how much they could steal by taking x% from someone?

On the other hand - would they steal that percentage per bank account/anything else they had decided to deem to be a bank account?

Premium bonds are grubbyment money (part of National Savings and Investments).Which is why I no longer have a NS&I bond. Rates have got more and more pitiful, anyway. And if they want my two £1 premium bonds, held for 50 with nary a winning, I won't lose any sleep over it. ISAs are just a tax-free savings vehicle, not some special kind of bullet-proof beastie. Although the popular view seems to differentiate them somewhat, with the public frequently upset to learn that their ISAs do count as savings for the purposes of claiming means-tested state benefits.

As Frugalsod points out, the line will be drawn wherever they want it to be drawn. Some commentators have been expressing the opinion for some time that only a mad person would keep more in the bank than a float to cover their bills. My big DDs go off today, and I shall be at the bank after work, getting my paws on some of the rest.

This spring, my Dad told me he'd gong for one of these new government pensioner savings thingummygigs. I told him I thought it was a government ruse to suck in a big chunk of cash from the pensioner cohort in order to have it handy if needed to loot later on. We laffed.

Mind you, he had finally admitted that they should have followed my advice about something years ago, rather than dismissing it out of hand, and that decision could have seen them much better off.

moneyistooshorttomention

Parents - eh....

The definition of you know you are really getting older is when they realise (eventually) that you are actually pretty good with money
- but, being parents, they still worry whether you have enough (well my father certainly does....)..

Now, I'll really be making progress if the time ever comes when they admit that, actually, I'm probably better with money than they are...:rotfl:.

I must be knocking on a bit then - as my parents do, occasionally, take my advice these days:rotfl:

************

Yep..I came to very much the same conclusion re those Government pensioner wotsits (mind you.....I don't think I counted as a pensioner to get at 'em anyway - even though I am....).

I can see why some people would fall for things like that - as I'm watching the finances of someone near me now with astonishment - as I hadn't quite believed anyone could be "that" bad with money....but some people are...and I'm laying odds with myself that they will come to grief (and drag others down with them - courtesy of doing a bankruptcy). Am leaving good clear water between me and them...as I'd kill them cheerfully (metaphorically speaking) if I were a "dragged down other".

That reminds me - one of a friends sons was still owed £2,000 by a former employer that had done a bankruptcy some years back the last I knew. Must ask if her son has ever been paid back....its the only time I've ever seen that friend ready to set out after someone with a shotgun (ditto metaphorically speaking).

moneyistooshorttomention

Actually, an edit on the above post is that one of the financial preps to take account of is to bear in mind the financial status (and likely future financial status) of others that we have/might have any financial dealings with.

There will be increasing number of people experiencing bankruptcies on the one hand/"doing a bankruptcy" on the other hand and its as well to ensure we all protect ourselves from knock-on effects of being one of their creditors if they do.

....and, for our part, be meticulous with our financial dealings with others - so that their finances couldn't be "dragged down" by ours.

With employers I've had in the past - there was no option but to be meticulous with my own finances - as I would have been sacked if I wasn't (and fair enough....I agreed with their stance on that). I've seen fellow employees pretty much frogmarched straight out the door the second investigations into them concluded with a verdict against them.

So - for our part - we do need to ensure we "do our bit" and ensure no-one else's cash flow/finances are impacted by anything that happens to ours. Its only enlightened self-interest imo anyway - as I know that the fact I pay my bills so very promptly ensures the workmen round here are starting to learn that makes me a decent bet as a customer and I think I am probably starting to experience better service because of it.

Frugalsod

moneyistooshorttomention wrote: »

Well...an Idiots Guide to what exactly are considered to be "bank accounts" at risk of "bail-in" (aka theft by another name - only undertaken by the Government) would be useful.

This sounds like a daft question, but when we talk about "bank accounts" - do we mean "bank banks" iyswim (ie Barclays, NatWest, Co-op) or are we including "bank style accounts" held with building societies (eg Nationwide Building Society, etc).

Are we even including savings accounts - ie a savings type account (rather than "bank account" type account iyswim) - but just the standard depositor account that gets savings put in there when spare and withdrawn if required and that's probably held in a building society, rather than bank bank.

On beyond that - other forms of savings - like ISA's, premium bonds, etc?

Where do we think the "red line will be drawn" if the Government starts nicking from our money in order to do a bail-in?

I suspect that it will be all accounts at the institutions impacted. In Cyprus the losses were 40% of deposits at one bank and 60% at another of deposits above €100 000. I suspect that it will be the same here. So here we could expect different figures depending on how badly each banks accounts really are. So Barclays with its huge derivatives book could see massive losses. The problem is that since the financial crisis banks accounts are now based on mark to model rather than mark to market. This can be used to hide a lot of junk and problem debt.

Building societies could be hit. The sign will be much bigger losses at the building societies. Though as these are mutual anyway there are no problems about bail ins as you are already an investor.

I suspect that they will have to use the bank guarantee limit £83000 or thereabouts as a starting point, or could use a lower figure. The problem with a lower figure is that it would hit a lot more people who have not quite enough money to exceed the guarantee limit which could result in claims for compensation. The problem is that if the government withdraws that guarantee then you could see a run on the banks start especially by larger account holders. So any elimination of that guarantee will probably happen at the same time that they announce the bank holiday. So that no one can move their money.

Until then smaller account holders could quite simply withdraw cash and keep it under the mattress. Which is why the war against cash is going to come. Though since most people have very little money anyway if they lowered the limit to £10 000 they still might not impact 50% of the population anyway. Also if they lowered it to the level anywhere near £16000 then they would start to hit means tested pensioners getting top up benefits. So hitting people who are already considered poor enough to get means tested benefits.

Though what would cause the problems are losses from foreign loans and a collapse in the property market. It could even come from losses on lending for investment into shares. If there is a margin call because of a falling stock market then there may be problems.

Since I think that property is significantly overvalued by more than 100% so that the average price will fall to around £75 000 rather than its current level of around £300 000 based on incomes. The only way that it has sustained these levels is based on ultra low interest rates but these interest rates are destroying the pensions industry. So by bailing out mortgages they have robbed people of their pensions. So a return to average long term interest rates could see property collapse to levels way lower than today. Look at Spain where property has fallen 50% of its former values. To try and clear this excess property they have offered citizenship to anyone who spent more than €500 000 buying a home there. The same could happen here so how will UKIP feel if even more foreigners turn up and become citizens, and in the process price the locals even further out of a home.

What the government are doing is to re-inflate the property bubbles to mask problems in the banks hoping that when the bubble bursts it is far enough into the future to make it someone else problem.

For most people clearing debts and then maintaining a low bank balance will be sufficient. Which is why everyone with a mortgage should be seriously overpaying right now. Personally I will be using excess funds to buy things that help me to prep further.

Frugalsod

What I would like to add is that in a bank bail in it will the employers that are hit hardest. They are more likely to have higher bank balances anyway and when they lose large chunks of their bank balance it will affect their ability to pay wages buy materials etc.

moneyistooshorttomention

Frugalsod wrote: »

What I would like to add is that in a bank bail in it will the employers that are hit hardest. They are more likely to have higher bank balances anyway and when they lose large chunks of their bank balance it will affect their ability to pay wages buy materials etc.

This has been part of my reasoning in getting as much of the renovation work done on my home as I could at warp speed - because I can foresee that there will be some firms that aren't good money managers themselves and they will go to the wall first and would start by not being able to get the materials they would need to do a job. After that - some of these dud firms might bring down perfectly good firms with them (ie because they owe them money). I can see that the cashflow situation for some firms round here looks a bit precariously balanced and I didn't want a firm going to the wall just when I had decided they were the one I was going to use for a job on the one hand OR us customers competing for a smaller number of firms to do our jobs (with the consequent wait to get a job done or possibly overcharging "because they could").

As you say - some of these firms will have larger bank balances and therefore be more vulnerable.

I have long thought the Government would not feel able to touch savings that individuals have that are beneath the amount allowed for benefits purposes (ie that £6,000 for people of working age and £16,000 for those who've reached State Pension Age).

Frugalsod

moneyistooshorttomention wrote: »

This has been part of my reasoning in getting as much of the renovation work done on my home as I could at warp speed - because I can foresee that there will be some firms that aren't good money managers themselves and they will go to the wall first and would start by not being able to get the materials they would need to do a job. After that - some of these dud firms might bring down perfectly good firms with them (ie because they owe them money). I can see that the cashflow situation for some firms round here looks a bit precariously balanced and I didn't want a firm going to the wall just when I had decided they were the one I was going to use for a job on the one hand OR us customers competing for a smaller number of firms to do our jobs (with the consequent wait to get a job done or possibly overcharging "because they could").

Yes the counter party risk is going to be significant. Smaller firms might not have the staff or expertise to be able to be aware of what is coming. Though they might be aware of problems if they keep a close rein on their credit control. In the past I worked for a firm that had a customer run into trouble and they bailed it out when the banks refused it credit. The firm started charging interest for this service and I had to create an invoice every month for that interest. The customer survived and the firm retained a customer who was otherwise a good customer.

Frugalsod

moneyistooshorttomention wrote: »

I have long thought the Government would not feel able to touch savings that individuals have that are beneath the amount allowed for benefits purposes (ie that £6,000 for people of working age and £16,000 for those who've reached State Pension Age).

You never know with a government who clearly favours the rich. They might hit everyone with a similar percentage amount which may cause problems for the low paid depending on when they are hit with the bail in.