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MSE News: Chancellor called to prevent 'absurd' savings protection cut

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A fall in the amount of savings protected if your bank goes bust is 'absurd' says the chairman of the Treasury Committee...
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Chancellor called to prevent 'absurd' savings protection cut

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  • Oblivion
    Oblivion Posts: 20,248 Forumite
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    I totally agree with Andrew Tyrie, it is absurd that we should lower the level of depositor protection just to suit the Eurozone failures.


    If anything, we should be raising it to £100,000.
    ... Dave
    Happily retired and enjoying my 14th year of leisure
    I am cleverly disguised as a responsible adult.
    Bring me sunshine in your smile
  • patanne
    patanne Posts: 1,286 Forumite
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    Totally agree. Whilst my own funds are still protected, I have a POA for funds which with 2 banks are in excess of this - on fixed terms. I am really dreading having to find NEW banks with even moderately reasonable access for a POA. I really hope something is sorted before this comes into effect, although I think by then I may be dealing with executors accounts and expect that to be yet another nightmare!
  • dunstonh
    dunstonh Posts: 116,886 Forumite
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    If anything, we should be raising it to £100,000.

    Which would go totally against the reasons for standardising it across Europe and avoid issues that came about during the credit crunch.
    I totally agree with Andrew Tyrie, it is absurd that we should lower the level of depositor protection just to suit the Eurozone failures.

    Its still higher than the old UK limit before Europe set the EU limit.

    MPs need to show some backbone and stop pandering to the stupid Daily Mail style campaigns which do nothing to explain but everything to ridicule.
    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: 23,686 Forumite
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    What's absurd is complaining about a reduction to £75,000 when the UK's preferred compensation limit (which still applies to investments) is £50,000.

    Let's campaign about the £50,000 investments limit, which we can do something about.
  • Oblivion
    Oblivion Posts: 20,248 Forumite
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    dunstonh wrote: »


    Its still higher than the old UK limit before Europe set the EU limit.


    So what? Stop living in the past, we need to make improvements for the future welfare of serious savers.
    ... Dave
    Happily retired and enjoying my 14th year of leisure
    I am cleverly disguised as a responsible adult.
    Bring me sunshine in your smile
  • patanne
    patanne Posts: 1,286 Forumite
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    The reduction to £75k is fine as long as there are no penalties for reducing accounts from the previous £85k protection. It will be a major pain to find new accounts (re POA) but as long as there are no penalties for moving some of the account I suppose I have to agree it is fair enough. Frankly just dreading trying to find reasonably managed accounts.

    Just wonder though why it is always necessary to have a race to the bottom!
  • Archi_Bald
    Archi_Bald Posts: 9,681 Forumite
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    Oblivion wrote: »
    So what? Stop living in the past, we need to make improvements for the future welfare of serious savers.

    No "serious saver" would have a need for much more than £75K in cash at any point in time in a single account.

    Remember there is a 6 month protection for up to £1m for "life events" which caters for certain temporary needs. http://www.fscs.org.uk/news/2015/july/new-protection-from-today-for-temporary-high-balances/


    But I challenge you:
    1. how many people have more than £75K in cash in a single account for longer than 6 months?
    2. why are you happy to "live in the past" when it comes to investments and are not asking for the protection for "serious investors" to be raised from £50K?
  • LadyDee
    LadyDee Posts: 4,293 Forumite
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    What if somebody has an ISA in which there is more than £75,000. How do you move the 'excess' into another ISA account without breaking the annual maximum savings allowance rules?
  • Oblivion
    Oblivion Posts: 20,248 Forumite
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    LadyDee wrote: »
    What if somebody has an ISA in which there is more than £75,000. How do you move the 'excess' into another ISA account without breaking the annual maximum savings allowance rules?


    Transfers of existing ISA savings from one provider to another does not affect your annual ISA allowance.
    ... Dave
    Happily retired and enjoying my 14th year of leisure
    I am cleverly disguised as a responsible adult.
    Bring me sunshine in your smile
  • Archi_Bald
    Archi_Bald Posts: 9,681 Forumite
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    LadyDee wrote: »
    What if somebody has an ISA in which there is more than £75,000. How do you move the 'excess' into another ISA account without breaking the annual maximum savings allowance rules?

    Simple. You transfer some of it elsewhere. Transfers have never counted towards the annual allowance, and still don't.

    Although I know there are a few people who actually do have more than £75K in cash ISAs, I question the wisdom of this. They would have vastly more money if they had accumulated the majority of their ISA contributions in S&S ISAs.
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