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

Oblivion

Archi_Bald wrote: »

me me me me me

BTW, you have ignore my Q as to 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?

You made a false assumption. I'd welcome that being raised to at least £100k too. Let's think positive.

masonic

LadyDee wrote: »

I don't suppose the consultation process is likely to find that solution by the time the new limit comes into force! That would be too much to hope for I suppose.

I think it's quite likely to do so. But even if it doesn't and you transfer out the excess money as the deadline looms, it is extremely likely you would be able to claim back any penalty you had to pay when the dust settled.

Paul_Herring

One is left wondering if "Andrew Tyrie, chairman of the Treasury Committee" would be as vocal about it, if the pound had got weaker instead and the amount covered actually increased in £ amount?

Or why "Andrew Tyrie, chairman of the Treasury Committee" didn't raise this as an issue sooner, say about the time the limit came in since he was part of the Treasury Committee in Dec 2010.

Or - and I may be coming across as somewhat cynical here - is "Andrew Tyrie, chairman of the Treasury Committee" simply trying to make a name for himself by jumping on the bandwagon currently going past his office?

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LadyDee wrote: »

So already having opened another ISA with the 2015/16 allowance elsewhere, the excess over the £75,000, can be transferred into another ISA in the current year?

If

• the funds being moved are from contributions before the start of the current tax year and
• the target account allows transfers without requiring current year's contributions

yes.

You can open as many ISA accounts as you wish during the year - the legal restriction is on "how many can contain contributions from the current tax year", which is "at most one."

As far as the legal stuff goes, previous years' contributions can be split and transferred as/how you wish.

Institutions have their own additional rules/foibles of course, like

• no transfers in,
• transfers out must be the whole lot, or
• they don't understand the fact that while monies may all be in the same account, 'this year's' contributions should be accounted for separately from 'previous years'' contributions.

LadyDee

Paul_Herring wrote: »

One is left wondering if "Andrew Tyrie, chairman of the Treasury Committee" would be as vocal about it, if the pound had got weaker instead and the amount covered actually increased in £ amount?

Or why "Andrew Tyrie, chairman of the Treasury Committee" didn't raise this as an issue sooner, say about the time the limit came in since he was part of the Treasury Committee in Dec 2010.

Or - and I may be coming across as somewhat cynical here - is "Andrew Tyrie, chairman of the Treasury Committee" simply trying to make a name for himself by jumping on the bandwagon currently going past his office?

---



If

• the funds being moved are from contributions before the start of the current tax year and
• the target account allows transfers without requiring current year's contributions

yes.

You can open as many ISA accounts as you wish during the year - the legal restriction is on "how many can contain contributions from the current tax year", which is "at most one."

As far as the legal stuff goes, previous years' contributions can be split and transferred as/how you wish.

Institutions have their own additional rules/foibles of course, like

• no transfers in,
• transfers out must be the whole lot, or
• they don't understand the fact that while monies may all be in the same account, 'this year's' contributions should be accounted for separately from 'previous years'' contributions.

Thank you so much for all that useful information.

Pincher

It's supposed to be EURO100,000 , it's just that the EURO has tanked, that the sterling equivalent is dropped.


When the EURO drops to £1=EURO1.50, we should insist they raise it to EURO110,000. All these letters notifying customers is just wasting our time and money.

polymaff

The point is - what can be achieved in the negotiations.

I'd suggest that Tyrie and others with some influence go for a compromise solution and that is:

Accept that the figure will change to £75,000 but insist that all fixed term accounts open as of 7th July 2015 retain their £85,000 protection until the end of their contractual term.

That way there will be no need for any arrangements to be made by the banks or their customers and it will uphold the idea that a commitment is a commitment to be honoured by all parties - surely a Conservative concept, Chancellor?

jimjames

Pincher wrote: »

It's supposed to be EURO100,000 , it's just that the EURO has tanked, that the sterling equivalent is dropped.


When the EURO drops to £1=EURO1.50, we should insist they raise it to EURO110,000. All these letters notifying customers is just wasting our time and money.

And if that happens then the limit will be raised in the same way as now.

All this is a fuss about nothing. If you have £150k in a single account then you'll be affected regardless of whether the limit is £85k or £75k. If you have £850k in 10 accounts then you'll jujst have to open another account or two. But as above it seems very unwise to hold so much in cash unless you have a specific reason in mind.

Pincher

jimjames wrote: »

All this is a fuss about nothing. If you have £150k in a single account then you'll be affected regardless of whether the limit is £85k or £75k. If you have £850k in 10 accounts then you'll jujst have to open another account or two. But as above it seems very unwise to hold so much in cash unless you have a specific reason in mind.

The twelve accounts need to have one banking license each.
What with Coutts and Cater Allen sold to major banking groups, it's a bit tricky.


You can have a wife with six accounts, I suppose.
Somehow, I suspect there's more chance of the wife running away with a gym trainer.


If you sell a second home, you can easily have £500k to £1million these days. Not a common problem 40 years ago. I expect Goldman Sachs will come along and give us a guarantee product. Obviously, they charge a fee, and if the bank goes insolvent, an insurance company pays out. Probably a limit of £10million, say.


It would be funny if they sold Greek account holders a balance insurance using a guarantee from a Greek insurer. in the event of a Greek exit, say threes year down the line, half the Greek banks go under, and so the insurer can't pay up, and goes under too.

hra_2

polymaff wrote: »

The point is - what can be achieved in the negotiations.

I'd suggest that Tyrie and others with some influence go for a compromise solution and that is:

Accept that the figure will change to £75,000 but insist that all fixed term accounts open as of 7th July 2015 retain their £85,000 protection until the end of their contractual term.

That way there will be no need for any arrangements to be made by the banks or their customers and it will uphold the idea that a commitment is a commitment to be honoured by all parties - surely a Conservative concept, Chancellor?

That is exactly what I ended up suggesting in my response to the consultation earlier this week (deadline today FYI) though I suspect they would be a bit more likely to listen to Andrew Tyrie...

The current proposal is half-baked despite coming at considerable bureaucratic cost. Someone with £80K can only make a one-off withdrawal down to the new limit of £75K, losing all their headroom for interest over the remaining term of the bond. The very next day after their withdrawal they are over the limit again. And some people currently under £75K will be affected, meaning the affected % of the deposit base is likely to be an underestimate. Those people will not even have the right to a one-off withdrawal at all.

It also comes at cost to the banks in terms of making special arrangements to vary the terms of their bonds, and maybe most importantly they will not have access to the full funds they were contractually expecting over the full term and may have traded on this.

Extending the £85K guarantee would avoid all this and also avoids any comeback against the PRA for specifying information sheets which did not mention any risk that the guarantee could be varied due to what amounts to a currency risk, which many retail depositors will not have known and would not have found suitable. It also does not lead to an influx of depositors from other EU countries as it only applies to existing deposits.

If the guarantee can vary during the term, UK depositors are actually disadvantaged against Eurozone counterparts who have this certainty by definition.

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

Archi_Bald

hra wrote: »

Someone with £80K can only make a one-off withdrawal down to the new limit of £75K, losing all their headroom for interest over the remaining term of the bond. The very next day after their withdrawal they are over the limit again.

I think you mean if they withdraw down to exactly £75K, they will be over the limit again as soon as they receive interest. This may be the very next day but is probably more likely some time in the future.

But in any case, it is, in principle, not one bit different to having to leave some headroom to be protected by the £85K limit. If anything, you need to leave less headroom for a £75K limit than you need to leave for the £85K one.

So this part of your argument seem a bit illogial. But all the other points you made should make sense.