bank compensation dropping from 1 Jan '16

Legacy_user

from a BBC website article (today, 3 July '15)

"Millions of bank and building society customers will get £10,000 less compensation if their bank goes bust, the Bank of England has announced.
The existing limit to the Financial Services Compensation Scheme (FSCS) is £85,000 per account.
But from Jan 1 2016, the amount will be reduced to £75,000.
The compensation scheme is run under a European directive, which sets the limit at €100,000 across the whole of the European Union."

I wasn't aware this was going to happen and will have to re-think where I'm keeping my savings etc from January next year. I daresay it will also affect many others who post here,
U.

alanq

This is mainly going to affect savings accounts rather than banking accounts.

There is an existing thread on the Savings & Investments board on this topic.

https://forums.moneysavingexpert.com/discussion/5279539

System

From Sky News online - and I have to agree with the guy from HL - it's bonkers...

"The current limit was established in the wake of the global financial crisis, based on the sterling equivalent of!€100,000, and was set to be reviewed every five years.
The timing of the new calculation has coincided with the pound strengthening against the euro as Greece teeters on the brink of financial meltdown.
Danny Cox, chartered financial planner, Hargreaves Lansdown, said: "This is absolutely bonkers.
"Savers are already suffering rock bottom interest rates, and now to add insult to injury the safety of that cash is being undermined.
"The popularity of both NS&I pensioner bonds and premium bonds demonstrates savers care as much about safety as they do about rates.
"Savers need to have the comfort of knowing they are protected in the event of a bank or building society collapse."
Andrew Tyrie, chairman of the Treasury Committee, said it is "absurd" that current depreciation of the euro should be forcing a reduction in the level of protection for UK deposit holders.
He said: "Many savers and small businesses arrange their finances on the reasonable assumption that the deposit cover will be stable.
"They might also reasonably have expected that any changes would be in an upward direction, to reflect inflation and growth.
"Many people will now have to re-examine the arrangements they have in place."

I included the info on this board, by the way, because, having 2 x 123 accounts at max as well as fixed term savings (because Santander offered good rates exactly when I had money to save) the total takes me over the current compensation limit. I read posts here so often from folks with 2 123 accounts, taken up for the advantageous interest rates, who may well have taken up good savings accounts rates from this bank, too. I didn't feel it was a savings issue alone and was intended as a 'heads up' to those reading this board.

pinkdalek

It's hardly the end of the world.
At least such a scheme still is in force, could be worse, could be withdrawing it completely.
You are aware that stock market investments are protected under a seperate scheme also?

MikeSuzuki

Like some late in working life, I have a mix of assets and some is cash in fixed rate bank savings, not too much but enough to have several which are at or close to £85K, or will be at maturity.
Those savings were put in with the then-existing FSCS limit was in force and in many cases, even if I wanted to, I cannot access or vary the amounts, unless I'm dead :-)
This seems an unreasonable change, affecting not just those who might save, but those who have done so already and now are stuck with multiple years 'over the limit'.
I would have done different things had I believed they would, in effective, retrospectively lower the limit.
My own belief is that it would be fairer to limit it (if they must do so) to £75K for new savings or those currently at or under £75K
Thoughts from forumites?
Probably hard cheese for me. Not that happy.

colsten

Stop panicking and read https://forums.moneysavingexpert.com/discussion/5279539

Answers / links to answers given in that thread.

System

The UK Treasury backs NS&I 100% if you are very concerned

jonesMUFCforever

I just wished I had £85k or even £75k LOL

joe134

alanq wrote: »

This is mainly going to affect savings accounts rather than banking accounts.

There is an existing thread on the Savings & Investments board on this topic.

https://forums.moneysavingexpert.com/discussion/5279539

As a lot on here, me included, use some Current A/cs as savings a/cs, we are affected.
I already cancelled my 3 x Bos a/cs,not long ago, before I read of this, by, £15k to reduce my monies with Halifax to £85k, now will have to do it again, and they are all long term fixed A/cs. Isas.
The allowance of "only once", may be a problem, if it's once per bank, and not a/c?? with currents, just either switch, or close them, but, with all in isas, needs more thinking.
Most of the currrent a/c's are under £5k,except, san 123's, so require mutiple withdrawals to reduce by £10k per bank?
All still a bit vague though.
I was caught out by the Icelandic banks, luckily Fscs, came to my rescue then, or, could have been left with a large loss, not gain.7% then.
Act in haste, repent at leisure.

Archi_Bald

joe134 wrote: »

All still a bit vague though

It is not all still a bit vague. The only area that still needs further clarification is fixed term accounts, and it is clearly defined what is happening about this issue.

You could always do as alanq suggested and go to the thread on the savings board as all questions are answered in that thread, or in links provided in that thread.

There is no reason to duplicate the discussion just because some people (incl myself) have some savings in current accounts.

joe134

Archi_Bald wrote: »

It is not all still a bit vague. The only area that still needs further clarification is fixed term accounts, and it is clearly defined what is happening about this issue.

You could always do as alanq suggested and go to the thread on the savings board as all questions are answered in that thread, or in links provided in that thread.

There is no reason to duplicate the discussion just because some people (incl myself) have some savings in current accounts.

As alanq s quote was on this thread, I replied to it on this thread, as, it is Bank Accounts, and only alanqs and your view that it is only savers that this will affect.
As my Bos were current A/cs, which I closed to get down to the £85k mark, and people have monies in both Current A/cs and savings, the £75k may affect both, so if it's all the same with you, I will stick around.
Never know, I might learn something.Free world innit.?;)