Financial Services Compensation Scheme

Geoffo_M

I know that if your bank/building society goes belly up, it is the total of all accounts that gets assessed for compensation purposes. But what happens if, say, you have savings with SAGA (who are financed by Birmingham Midshires), and you also have savings with Birmingham Midshires (who are owned by Halifax), and you also are lucky enough to have savings with Halifax - if Halifax goes t**s up (unthinkable, I know), is that 3 separate claims for compensation, or just one?

MarkyMarkD

I would suggest it depends on who has the banking licence.

Birmingham Midshires isn't owned by Halifax. It is a division of Halifax plc - i.e. it's the same banking licence.

Saga savings is operated by Birmingham Midshires, which is a division of Halifax plc. So that's the same banking licence too.

I would suggest that in the circumstances you describe, you'd be capped at the single limit across all your various banking relationship with Halifax plc.

Geoffo_M

MarkyMarkD wrote: »

I would suggest it depends on who has the banking licence.

Birmingham Midshires isn't owned by Halifax. It is a division of Halifax plc - i.e. it's the same banking licence.

Saga savings is operated by Birmingham Midshires, which is a division of Halifax plc. So that's the same banking licence too.

I would suggest that in the circumstances you describe, you'd be capped at the single limit across all your various banking relationship with Halifax plc.

I'm afraid that I think you are correct. Yet, this isn't made clear in each of the T&C's. You are led to believe that you are banking with that organisation, be it Saga, BM or Halifax. There are no warnings as to claim limitations - something we should perhaps consider in the current climate

sanfly

really interesting point made in these threads, never thought about it before, if you have several accounts does this mean we should be checking who is the parent company...........what a nightmare this could have opened up for lots of savers......

Simple_Simon_2

Geoffo_M wrote: »

I'm afraid that I think you are correct. Yet, this isn't made clear in each of the T&C's. You are led to believe that you are banking with that organisation, be it Saga, BM or Halifax. There are no warnings as to claim limitations - something we should perhaps consider in the current climate

I understand that both you and the other poster are giving your take on the original question. But with the greatest respect, I think the original poster like myself is looking for a definitive answer. Who do you suggest we seek a definitive answer from on this website? The Man Himself?

Thanks.

Geoffo_M

Simple_Simon wrote: »

I understand that both you and the other poster are giving your take on the original question. But with the greatest respect, I think the original poster like myself is looking for a definitive answer. Who do you suggest we seek a definitive answer from on this website? The Man Himself?

Thanks.

Nor sure Martin would know the answer. I should imagine 'dunstonh' might know.Intelligent Finance is also part of Halifax, so arguably, you could have invested £35k in each of Halifax, IF, Birmingham Midshires and Saga - a total of £140k. If the companies failed, you would be under the assumption that you would receive compensation of £126.8k (ie £31.7 x 4) - when really if there are treated as one company, you would only receive £31.7k, thereby losing £108.3. Not a comforting thought. And maybe not so far fetched these days!

MarkyMarkD

Whilst I'm not promising I'm right, I'm 99.99% certain that I am.

The FSCS website states:

The compensation limit of £31,700 applies to each depositor for the total of their deposits with an organisation, regardless of how many accounts they hold or whether they are a single or joint account holder.

It also states that the FSCS covers FSA regulated firms. FSA regulated firms include those organisations which have a banking licence.

BM is not an organisation, or a regulated firm. Halifax plc is.

From BM's website:

Birmingham Midshires is FSA registered number 106048 (as a division of Halifax.)

From Halifax's website:

Halifax's FSA registration number is 106048.

Spot the difference!

MarkyMarkD

All this is very academic. The number of failures of UK banks and building societies can be counted on the fingers of one hand.

The chances of any high street bank or building society failing is minimal.

And when there have been failures, other institutions have taken over the assets and liabilities and customers have not generally lost out at all.

gt94sss2

As has been said, the FSCS covers a individual per banking licence - and thats what you need to check

Sometimes 'branded' institutions (Tesco's/Sainsbury's etc) will have their own banking licence - others will fall under that of another financial institution.

In the particular case of Halifax/Intelligence Finance/Birmingham Midshires they all come under one banking licence (Halifax's) and are considered as one under the FSCS.

At the moment, both the Bank of Scotland and Halifax have separate banking licences (HBoS actually has 4 licences atm!) but from the 17 September:

- Bank of Scotland plc
- Halifax
- Birmingham Midshires
- Intelligent Finance

will all become divisions of Bank of Scotland plc all fall under its banking licence. Some more information here.

However, as MarkyMarkD has said its all very academic, if the FSCS was needed because HBOS had problems - we would all have much bigger things to worry about than recovering £30k each!

Regards
Sunil