You can run but can you hide ????

Mr_Frugal

I have my current account (only a couple of grand) with A&L and my savings with B&B (which is just over double the current FSA upper 'protected' limit).

Just my luck to have most of my worldy possesions in 2 out of the 3 banks that are being hit by plummeting share prices amidst the current fear !!!

Ironically, I have been sitting here criticising those Northern Rock customers that have been rushing to withdraw and now that I find myself in a similar position I am beginning to doubt my convictions.

Should I 'do a runner' ? And if so is there anywhere to run ?
Is the government's promise of protection open to all banks now ? (If so could someone be kind enough to pass a link to any articles)
Does the government 'ringfencing' cover all my savings or just the 1st £35k ?
Is it worth the paper it is written on ?

What would you do ?

KorkyKat

I'd do a runner with B&B. They reckon it will all be shaken out within the next four weeks. Why lose sleep over a few quid's worth of interest when you can put it somewhere more safe and then make a decision in a month's time.

I pulled out of Northern Rock six weeks ago when I started seeing the shares go into free fall.

I wouldn't trust the Government to underwrite each and every bank/society - unless it becomes an act of parliament. Remember the pensions fiasco?

Having said the above. It isn't in Labour's interest to to screw the public with an election in the offing. The Tores and Liberals are already making capital (no pun intended) out of the present situation.

It will all come out in the wash when the FED auditors find all the missing sub-prime loan rolls.

Mr_Frugal

Is the HSBC any safer than B&B ?

Or am I just going to be jumping from the frying pan to the fire ?

Maggs5203

Hi
Just wanted to say a BIG THANK YOU to Martin for appearing on Alan Titchmarsh's show (17 Sept 2007) and allowing me to understand the Northern Rock problems.
The night before all these problems came to light, my husband and self signed up for a Northern Rock mortgage, can you imagine our surprise when we turned the TV on, on Friday morning.
Only Martin has put it into a nutshell and spelt it out for those of us who don't understand all the money jargon out there. He's an angel :A .
:T

Mr_Frugal

Will temporarily shift £30k in to HSBC as a safety measure me thinks. Still leaves me a little exposed at B&B.
The 35k protection isn't just on current accounts also is it ? Hope that extends to savings accounts (otherwise little point in moving it).

Thanks for your thoughts.

Oval1957

I am in the same boat as you Mr Frugal. I have my life savings in BB and have whizzed it all over (bar 33k) to the HSBC (First Direct), who are today ,I think, about to announce a rate increase in savings.

Somerset

Mr_Frugal wrote: »

Will temporarily shift £30k in to HSBC as a safety measure me thinks. Still leaves me a little exposed at B&B.
The 35k protection isn't just on current accounts also is it ? Hope that extends to savings accounts (otherwise little point in moving it).

Thanks for your thoughts.

Heard Martin on the radio so I'm quoting him. The 35K is your total investment in the institution whether current, saving, bond etc. A lot of people ( on th radio ) seemed to think it's per account, but it's the 'total pot' with the institution.

Steve_xx

Alistair Darling has given an assurance that all funds with all banks will be protected during the "current" turmoil. This turmoil will end at some point. Therefore, so will Alistair Darlings assurance, since he did not put a timer on it, rather cleverly!

If you have in excess of £33k in any one bank, then it makes sense to move the residue to other banks. Not because of the current turmoil specifically, but because it makes sense to limit risk. The current turmoil has shown that we really don't know what banks do with our cash and so it is probably best to live within the FSA compensation cap and spread/minimise/limit your risk by using several banks.

At current interest rates you would accrue approximately £2k in interest on £33k within a year.

Badger_Lady

Banks that have a heavy base in customer deposits (i.e. current accounts and savings) compared to lending (i.e. mortgages) will not be affected by the issues around Northern Rock, because they have liquid cash available from these customer deposits and do not depend on borrowing from other banks.

If you go for one of the big 5 (Lloyds, Barclays, HSBC...), you'll be safe. I'm in no way suggesting that you're not perfectly safe where you are.