Barclays Offset -How Safe now?

busy_b

I raised a query on another Thread which has left me with a dilemma.

If I have offset all my savings against my mortgage (36k) I wondered if I would be covered if this Bank went down the Northern Rock route as everyone seems to be scaremongering this at the moment.

Someone has stated that only the net amount is covered and therefore I would have a net amount of zero !!

I would have thought that the 36k in savings would still be classed as savings even though I am using them to offset and not receiving interest!

Can anyone clarify?

silvercar

Someone has stated that only the net amount is covered and therefore I would have a net amount of zero !!

Should have been clearer!

What I meant was, should the bank go bust, your outstanding mortgage less your savings is a zero balance, so your savings and mortgage would be cancel each other out and your mortgage would effectively be paid off. ie the bank would owe you nothing and you would owe them nothing for the mortgage.

busy_b

Cheers Silvercar, been driving myself mad with this one and got a few people thinking on one of the other threads!

I'm still gonna ring the bank and confirm - I'm a nervous wreck when it comes to savings, mortgages and anything to do with money !

Thanks again !

silvercar

Better off asking the FCSC. If the bank went bust, any previous promise they had made would be worthless.

busy_b

Will do, thanks again.

Loads of people have tried to re-assure me on here that Barcalys will never go bust and I tend to agree but I would like to have some form of written guarantee that my money's safe.

It just seems to be a tricky area the fact that I'm offsetting.

sarkin

If Barclays goes bust I suggest you grab your coat switch the lights off and leave the country. I think Barclays is a completley diffrent beast to Northern Rock. There have been rumours that they tapped the BOE for some cash but so far not proved and they have a very diverse range of funding where as Northern Rock had no money in the first place. They were just middle men in a mortgae transaction.

sarkin

Just announced on the bbc website Barclays have lost 800 million on the sub prime crisses http://news.bbc.co.uk/1/hi/business/7095809.stm

which is a drop in the ocean for these guys.

Debt_Free_Chick

sarkin wrote: »

Just announced on the bbc website Barclays have lost 800 million on the sub prime crisses http://news.bbc.co.uk/1/hi/business/7095809.stm

which is a drop in the ocean for these guys.

But to be clear, that's the investment banking division of Barclays (Barclays Capital) and nothing to do with the retail division for savers & borrowers.

silvercar

From the FSCS website:

5. What happens if I owe money to a bank, building society or credit union that fails?

Amounts owed to the failed firm (for example, loans, mortgage or credit card debts) are taken into account before any compensation is paid.

busy_b

Thanks Silvercar (again), sorry to have repeated myself on other posts !

Just gone through all my paperwork again and half of it is Barclays letterheads and half Woolwich - Are they one and the same? (this is probably common knowledge but I haven't got a clue having always banked with Abbey until now)!

EdInvestor

busy_b wrote: »

Just gone through all my paperwork again and half of it is Barclays letterheads and half Woolwich - Are they one and the same?

Yep.I too would say there is no need to worry about Barclays.