MSE News: Safe savings limit to fall by £10,000 to £75,000 from January 2016

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  • colsten
    colsten Posts: 17,597 Forumite
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    MARTYM8` wrote: »
    As some one who experienced the Dot Community debacle with my ISA earlier this year its worth noting this protection only applies if the bank/credit union/building society collapses/goes into administration.

    As we all found the organisation can basically have cash flow issues/fail to meet regulatory requirements and deny you access to your cash for weeks or even months (4 months in our case) while the regulators mess about trying to sort the problem out. We eventually got our cash when it went into administration - but imagine being told sorry you may want your funds but you cannot have them for 4 months!
    we weren't ever told how long we'd have to wait for our money. All we got for four months was some repeated woffle from Dot Community about the agreement they were imminently going to strike with the PRA but nothing ever materialised. I am quite sure they'd still be playing those games if we hadn't raised the issue with the highest levels of FSCS.

    As you say, it's very important for people to understand that the FSCS guarantee only kicks in when the company is declared in default, and that this can be a long drawn out process.
    MARTYM8` wrote: »
    And this doesn't apply to bail ins either - which have occurred in Cyprus, are likely to occur in Greece (30% hit on deposits in a bank of more than 8,000 euros if you believe the FT yesterday) and if our banking system goes pear shaped again maybe here one day.
    we can be a lot more relaxed as we don't have a currency union and the BoE can print lots of money whenever it is deemed necessary. If such printed money were worthless, we'd have much bigger problem than money. So I think the FSCS guarantee is still very reassuring.
  • dunstonh
    dunstonh Posts: 116,597 Forumite
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    Here we go again, another thread on the same subject.

    With the Greek Banking system on the verge of collapse, with possible contagion to the rest of the Eurozone, what better time for the idiots at the Bank of England to undermine confidence in the British banking system.

    Why are they idiots for following the law?

    There is no undermining being done. The EU single 100,000 euro limit is to reduce flows from one country to another because one may be more favourable than another.
    If the Euro depreciated to say 5 Euro to 1 GBP, then the current logic would say that the UK should only offer £20,000 protection. This is absolutely bonkers.

    It should be remembered that the 100,000 EU limit was higher than the UK limit at the time and remains so even with the currency fluctuation.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • masonic
    masonic Posts: 23,475 Forumite
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    dunstonh wrote: »
    Here we go again, another thread on the same subject.
    Blame MSE Paloma ;)
  • Archi_Bald
    Archi_Bald Posts: 9,681 Forumite
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    dunstonh wrote: »
    Here we go again, another thread on the same subject.

    I did try :p
    Archi_Bald wrote: »
  • jimjames
    jimjames Posts: 17,668 Forumite
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    MSE_Paloma wrote: »
    If you've got more than £85,000 saved with one institution, you should start thinking about moving your cash around...

    Daft headline really.

    If you have MORE than £85,000 with one institution you should have dealt with it before now. This new limit of £75,000 won't affect any amount you have over £85k, just that another £10k won't be covered.

    Or did they really mean if you have more than £75,000?
    Remember the saying: if it looks too good to be true it almost certainly is.
  • Reaper
    Reaper Posts: 7,285 Forumite
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    To try and head off the predictable feedback can I quickly say:
    1) It was the EU that made us raise it from £50k protection to £85k in the first place.
    2) It was done to create a level playing field and stop people moving savings out of low guarantee countries into high guarantee countries (eg Ireland offering 100%) causing a bank liquidity problem in the ones it was draining out of.

    It is a sensible policy. As the UK is not in the Euro it needs rebalancing with the declared Euro compensation rate occasionally so we are not too far out of step. As it would be annoying to rebalance daily it was agreed to only do it every 5 years, unless something dramatic happens.
  • Rollinghome
    Rollinghome Posts: 2,677 Forumite
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    edited 7 July 2015 at 10:08AM
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    masonic wrote: »
    Blame MSE Paloma ;)
    Yep, and probably very difficult for her to avoid sometimes - unless she were to read every tedious thread posted here. And who, other than those with little better to do than to spend their entire lives here, would want to do that? ;)

    If there were only threads on entirely new subjects I'd be surprised to see more than one a month.
  • TheTracker
    TheTracker Posts: 1,223 Forumite
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    Yep, and probably very difficult for her to avoid sometimes - unless she were to read every tedious thread posted here.

    When Palomas post appeared (3rd at 15:34) Archi's clearly titled thread had 16 comments and was top of page. The first post to Paloma's thread was Archie asking for them to be merged. Seems very sloppy on MSE part not to merge threads in such circumstances.
  • magpiecottage
    magpiecottage Posts: 9,241 Forumite
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    Do bear in mind that, in the end, the consumer pays for the FSCS. It is not government money.

    I recently found an IFA that I carry out work for has to charge about three per cent extra just to cover the FSCS levy to meet claims against businesses it has nothing to do with that have sold products which, in many cases, it would never have dreamed of selling.

    Your mortgage lender, insurance company, pension provider and any regulated investment provider also have to pay a levy to the FSCS.

    This is in addition to regulatory fees, levies to the Financial Ombudsman Service and professional indemnity insurance.

    Do not assume FSCS cover is free. It is not. It costs us all - and for what it provides is relatively expensive.
  • colsten
    colsten Posts: 17,597 Forumite
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    Do bear in mind that, in the end, the consumer pays for the FSCS. It is not government money.
    As an aside, there's no such thing as "government money" either - only taxpayer money that the government spends.
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