£30K compensation - is Martin right?

webwiz

In his weekly email 12th Sep Martin says that savings in banks etc are protected up to £35K per bank. Is this right? I thought it was a total of £35K across all accounts. If I am right it still makes sense to divide your cash to spread the risk but if you had for example £35K in each of two banks which both defaulted you would only get one lot of compensation (£2K + 90% of £33K)

YorkshireBoy

http://www.fscs.org.uk/consumer/FAQs/Deposit_claims_FAQs/

webwiz

Yorkshire Boy I have looked at the FAQ site you posted (thanks) but I can't see the answer there.

isofa

You are covered for each bank/BS/organisation.

If you had 2 accounts in the same bank/BS, you'd only get one lot of compensation if they folded.

However if you have 2 accounts in two separate banks, and both folded, you'd get compensation for each bank.

nobblyned

Its per bank. Even so, the chances of one bank defaulting are tiny, let alone two simultaneously.

If you have more than 35k in savings then the most risk averse stance is to spread it between banks into accounts under that limit.

webwiz

isofa wrote: »

You are covered for each bank/BS/organisation.

If you had 2 accounts in the same bank/BS, you'd only get one lot of compensation if they folded.

However if you have 2 accounts in two separate banks, and both folded, you'd get compensation for each bank.

What is the definition of "separate" here? Many banks are owned by other banks.

YorkshireBoy

webwiz wrote: »

What is the definition of "separate" here?

Having different banking licence numbers.

Example 1 - Halifax and Bank of Scotland have this week amalgamated into just the one banking licence number, meaning the level of protection has reduced if you hold more than £35K spread across both institutions.

Example 2 - NatWest and RBS, although 'linked', each have their own banking licences...so the FSCS guarantee covers you for up to £35K with each.

MSE_Martin

Technically its per legal indentity/institution. I decided to say per bank as in most cases it turns out to be that - it is a little confusing.

For example RBS/NatWest are the same group but seperate institutions thus you're protected for up to £35k in each of them

Abbey and Cahoot are the same institution so you've only £35k protection in them.

webwiz

Thanks everyone who helped clear that up. Is there a site that shows the banks' relationships and whether they have their own or shared licences? How about Woolwich & Barclays?

YorkshireBoy

webwiz wrote: »

Is there a site that shows the banks' relationships and whether they have their own or shared licences?

I'm not aware of one (question has been asked on here many times since the Northern Rock & HBoS issues over the last week or so). However, by examining provider websites (legal/about us) and searching http://www.fsa.gov.uk/register/home.do it is possible to work the relationships out.

How about Woolwich & Barclays?

"Woolwich" is a trading name of Barclays Bank PLC. Barclays Bank PLC is authorised and regulated by the Financial Services Authority

http://www.woolwich.co.uk/ (bottom of page)

Apreciar

Relared to this matter, I was surprised to hear on the BBC working lunch that if a joint account is held aech person is eligable for the FSA compenation, so £64K not just £32, trhis was contrary to my own understanding of the scheme.