FSCS cash limit coming down to £75K / new £1m temp protection

alanq

Easy to forget that prior to the financial crisis only £2,000 was guaranteed + 90% of the next £28,000. That was one of the reasons for queues outside Northern Rock - a high proportion of savers feared that they would lose 10% of their savings.

colsten

evenasus wrote: »

I do have some in fixed term bonds which don't mature until 2018. It's all well and good being allowed a withdrawal but a pain to find somewhere else to deposit.

You are a bit previous when assuming that you will have to withdraw some money. The consultation period has only just started, and fixed term account holders will be notified of their options in due course.

Keep your powder dry, and don't blame the EU for ensuring you have a better deal than you'd have from a succession of UK governments.

SJshah

2010 wrote: »

EU interference yet again.

Without the EU "intereference", we wouldn't even have this amount of protection! Do you think the UK government want to protect your money?

masonic

I suppose we should all be thankful the new limit has already been set and will be fixed for the next 5 years. It's looking like the Euro could weaken further this coming week...

2010

Andrew Tyrie, Tory chairman of the Treasury Select Committee, is writing to the Chancellor asking him to push for EU rules to be changed to allow the guarantee to be raised back to £85,000.
He said: ‘It is absurd that the 16 per cent depreciation of the euro largely brought about by the crisis in the eurozone in general and the Greek crisis in particular, should be forcing a reduction in the level of protection available to UK depositors.
'In this respect, the EU Deposit Guarantee Scheme Directive is defective. It has been designed without adequate consideration for the requirements of those, like the UK, in the EU but outside the eurozone.’


Read more: http://www.dailymail.co.uk/news/article-3150354/Outcry-10-000-cut-safety-net-savers-Absurd-EU-compensation-limit-say-MPs.html#ixzz3f5bGck5c


With only the UK and Germany paying in more than we get out of the EU,it`s about time the tail stopped wagging the dog.

Reaper

2010 wrote: »

Andrew Tyrie...said: ‘It is absurd that the 16 per cent depreciation of the euro largely brought about by the crisis in the eurozone in general and the Greek crisis in particular, should be forcing a reduction in the level of protection available to UK depositors.

Already answered above. Just because the Daily Mail and a publicity seeking MP says it does not mean it is right.

There is a good reason for a level playing field. Early in the crisis the Irish government said it would guarantee 100% of deposits. That meant big savers started to move money to Irish banks making the initial liquidity crisis worse elsewhere. By having the same limits everywhere it stops that happening (unless you are Greek!)

So a sensible policy which has benefited the UK, and yet it is still being spun as EU interference - standard Daily Mail fare.

alanq

masonic wrote: »

I suppose we should all be thankful the new limit has already been set and will be fixed for the next 5 years. It's looking like the Euro could weaken further this coming week...

"When will the limit be reviewed again?

The directive requires the PRA to review the limit every five years. The limit of £75,000 is unlikely to change before then, unless there are unforeseen events such as significant currency fluctuations.



http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-limit-changes/#question16

williamro

.... affects .... more poor journalism

It's a good example of poor journalism. The tightening of a constraint that effects a small number of people is given broader coverage and more attention than the loosening of another constraint that brings benefit to many more.[/QUOTE]

hra_2

alanq wrote: »

"The PRA is consulting on rules that will require firms to allow depositors to withdraw funds from the account or accounts of their choice, including fixed-term accounts, even in circumstances where the depositor has an instant access account that could also be reduced. However, this rule will allow a depositor to make only one withdrawal without charge."
http://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-limit-changes/#question11

Has anyone here looked at the consultation paper on this? It doesn't seem to make sense given the overall aim of maintaining depositor confidence:

http://www.bankofengland.co.uk/pra/Documents/publications/cp/2015/cp2315.pdf

This is the text relating to the one-off withdrawal (para 2.3):

Until then [31 Dec 2015] depositors can make a request to their bank, building society or credit union to withdraw an amount up to the lower of (i) the amount by which their aggregate deposits exceed £75,000 and (ii) £10,000 without charge, penalty or loss of interest.

But there is nothing I can see in the document to cater for fixed rate bonds maturing beyond this date, which could mean several thousand pounds of interest at risk over the remaining years.

The Person A in the example in para 2.3 who has £80,000 may well have deliberately kept their deposit well below the limit to allow headroom for protection of interest - their level of protection would not be maintained.

Also there would be customers with deposits under £75,000 at the moment who could be affected. E.g. someone with a relatively recent fixed rate ISA where the interest is paid in and rolled up. They would not be eligible for the transitional arrangements and their level of protection would not be maintained either.

If though there are provisions for fixed term maturities after the transition period somewhere in these consultation documents it would be very helpful to post it here!

Archi_Bald

hra wrote: »

Has anyone here looked at the consultation paper on this? It doesn't seem to make sense given the overall aim of maintaining depositor confidence:

You have until July 24 to respond to the consultation document.