Large amount in one bank account

PeacefulWaters

It's a bit like having your money in northern rock in the summer of 2007, except this time you can foresee the possible outcome.

isasmurf

dales1 wrote: »

The £1m temporary protection is limited to eg property sales money, NOT for savings towards property buying.
https://www.fscs.org.uk/what-we-cover/questions-and-answers/qas-about-temporary-high-balances/
You should certainly move from Coop, and NSI is an easy and 100% safe option.

Dales

I'd agree that saving towards property buying is not covered, but thats not what hes doing. He's consolidating his savings in preparation to use shortly to purchase a property.

Property purchase is mentioned on the Q&A page linked to earlier, but a conveyancer would need to provide evidence

That said I'd still be strongly suggesting keeping it below the 85k limit until it a few days before it is needed for peace of mind and because it takes a lot longer to recover your money above that limit. It's almost certain that a house purchase would fall through if relying on a temporary high balance reclaim

For confirmation on whether or not it is covered the OP should contact the FSCS

https://www.fscs.org.uk/contact-us/
.

Eco_Miser

fscs wrote:

Sums paid to the depositor in respect of:

Real estate transactions (property purchase, sale proceeds, equity release) relating to a depositor's main or only residence

seems to suggest that money gathered together for a property purchase would qualify, but I'd rather put it in NS&I, where there's no question it's protected.

greatkingrat

It depends what stage of the process you are at. If you have exchanged contracts and are waiting for a completion date I think it would be covered, if you are just looking at buying a property at some point in the future, probably not.

bowlhead99

greatkingrat wrote: »

It depends what stage of the process you are at. If you have exchanged contracts and are waiting for a completion date I think it would be covered, if you are just looking at buying a property at some point in the future, probably not.

At the end of the day, such distinctions are important because if you want FSCS to pay out a claim on a 'temporary high balance' basis you will need to submit an application and evidence supporting your claim that all or part of the money in the account in excess of the standard coverage level qualifies for the temporary high balance treatment. They will then take that evidence into account, together with other information they think relevant, in determining whether your claim is successful.

Monies deposited in an account in preparation for the purchase of a private residential property, where the property is going to be purchased by the person whose account it is, is one of the various allowable criteria for a claim of temporary high balance.

However, it needs to be supported by evidence, and of course 'temporary' is also important because the special protection only runs for a period of six months from the first date on which a temporary high balance was credited to the person's account (or was legally transferrable to them if we were looking at a situation where you had disposed of a property or got a divorce settlement but hadn't bothered to collect it ASAP).

So if you were due to complete three months from today on July 12th, and had originally first gone over the £75k threshold on, say, January 10th, and Co-op bank goes under on July 11th, you can't say that the FSCS must pay you out the money stored at Co-op that exceeded £85k, as it is demonstrably not a 'temporary' balance. You have had funds in excess of the limit for in excess of 6 months so it is not an accidental short term thing that you can say was necessary and incidental to your house purchase.

You can certainly store it in £85k chunks in different banks, only using 'normal' limits (or in one lump at National Savings & Investments where no FSCS comes into play) and then move it in to Co-op for the last few weeks waiting for completion - that's perfectly allowable, assuming you are able to put the evidence together that there was a purchase going on.

But even if you felt you would have 'a good case' to put to FSCS about the nature of the temporary balance within your evidence pack, it is not worth chancing it to gamble that £100k lost would be recovered. For a start, they may take three months to pay out after the claim has been made, which would be no fun if the seller was demanding compensation for each day you couldn't get hold of the funds.

OP or others could check out the PRA rulebook if they were interested. But far better to not put yourself in that situation, and then you don't need to be interested.

mollycat

ALADINSANE wrote: »

I am now collecting all my savings to buy a property
So far I have gathered £196000 and it is sat in a cooperative bank account
I have 3 months to go before the house is ready
How safe is my money and how safe is the cooperative
Bank
Any advice would be appreciated

This is either a wind up or complete and utter recklessness!

£196K in a Co-op bank account? (Or even any single bank account) :eek:

OP, take advice above, get it below £85K asap.

eskbanker

Cristy_Jones wrote: »

Hi! just a quick reply, do not put all your eggs in one basket for safety purposes.

But just to reiterate the point made several times already in the thread, it's safe to put all your eggs in one basket if that basket happens to be called NS&I....

[Deleted User]

eskbanker wrote: »

But just to reiterate the point made several times already in the thread, it's safe to put all your eggs in one basket if that basket happens to be called NS&I....

Yes the good news is that the eggs may be safe.
The bad news is that taking the eggs out is slow as it's done by BACS. Not handy if you need to pay for for a house purchase on the day of Completion.

eskbanker

Deleted_User wrote: »

Yes the good news is that the eggs may be safe.
The bad news is that taking the eggs out is slow as it's done by BACS. Not handy if you need to pay for for a house purchase on the day of Completion.

It was the safety aspect that I was commenting on but in any case BACS would only be an issue for those incapable of a simple bit of planning - I think you'll find that most people putting £200K from savings into a property purchase are likely to have at least an inkling that they'll be doing so three days before completion, rather than feeling the need to conduct the entire withdrawal transaction in real time on the day!

[Deleted User]

eskbanker wrote: »

I think you'll find that most people putting £200K from savings into a property purchase are likely to have at least an inkling that they'll be doing so three days before completion, rather than feeling the need to conduct the entire withdrawal transaction in real time on the day!

In my experience such transfers have to be done on the day into a third party account. It would be highly inadvisable to arrange for all the cash to be paid from an NS&I savings account and risk disaster by it not reaching the 3rd party by the deadline.