If there's a banking collapse how much does UK govt guarantee?

muppetry

I heard that the UK Govt guarantees x thousand of your savings in the event of a bank/building soc collapsing. So you should spread your money across many banks, not have all eggs in one basket. Is this true? What is 'x'? Do you have to spread across banks/building socs or can you spreads across accounts in same bank/building soc?

toontastic

100% up to 30,000 and then 90% after isn't it?

ic

No, the FSCS pays 100% of the first £2,000, then 90% of the next £33,000 - in other words the maximum payment is £31,700. I guess a good excuse to spread money around a few banks.

http://www.fscs.org.uk/consumer/key_facts/Limitations_of_the_scheme/Compensation_Limits/

jamesd

The Financial Services Compensation Scheme is paid for by consumers via a levy on the providers of financial services and guarantees 100% of the first 2,000 of a deposit, 90% of the next 33,000 and nothing beyond that 35,000 total. Maximum loss is 3,300 plus all the money over 35,000.

To eliminate your loss risk you'd need to stick to a 2,000 maximum balance.

The limit applies collectively to all of your accounts with the same institution so you need accounts at different institutions to get more protection. Joint accounts are assumed to be split equally when working out how much each holder has with the institution, unless there's some evidence that another split existed.

The largest potential loss for many people might be the money in their mortgage offset account, assuming that that is treated like any other deposit.

dunstonh

The Financial Services Compensation Scheme is paid for by consumers via a levy on the providers of financial services

ROFL.

The scheme is paid for by consumers....... via a levy on providers of financial services.

In other words, it is not paid for by consumers, it is paid for by the financial services companies (including IFAs like myself).

moneylover

was reading this afternoon on 'This is Money' (I think) that splitting money between different institutions isnt always the whole answer as banks operate subsidaries under different names. So Halifax/Bank of Scotland has IF, Birmingham Midshires and Sainsburys etc. Only if a subsidiary is separately authorised by the FSA would it count as a separate claim. In the article it stated that HBOS says none of their savings accounts are authorised separately.

[Deleted User]

dunstonh wrote: »

ROFL.

The scheme is paid for by consumers....... via a levy on providers of financial services.

In other words, it is not paid for by consumers, it is paid for by the financial services companies (including IFAs like myself).

Who are in turn paid for by investors, your making good money, so stop complaining!

Reminds me of when burns turns around to smithers and says i dont know about giving the workers their 1% rise, times are tough, at which point the ceiling bursts open, treasures and cash fall down and they look at each other and shout "money fight"

dunstonh

Who are in turn paid for by investors, your making good money, so stop complaining!

I'm not complaining. I just had to smile and the way it was worded.

That said, I didn't enjoy paying out just over £6000 in levies this year towards the various Govt departments with their overspending on wallpaper and coffee machines.

barak

Question for dunstonh - or anyone else who knows the answer!

In view of the recent publicity re. the HBoS Banking Licence consolidation, is there anywhere where savers can check who holds the Banking Licence for any particular institution?

silvercar

jamesd wrote: »

The largest potential loss for many people might be the money in their mortgage offset account, assuming that that is treated like any other deposit.

Can someone confirm this?

Is an offset account (not a current account mortgage) treated like a deposit account or is the net amount ie the outstanding mortgage less the offset savings what counts?

jamesd

dunstonh, I thought that might give you a laugh. It was worded that way to get as far as possible from the idea that the government is doing the guaranteeing and point out that in the end the consumers are paying for it. Of course, you get to pay the actual bill.