How real is the risk of major bank collapse ?

Mistermeaner

Given changes in banking regs around split of retail and corporate banking how real is the risk of one of the big globals going under and people needing to rely on the 85k (is that right?) Government protection

Specifically I'm organising the estate of a deceased person and short term at least i am consolidating all the monies inc isas with nationwide

Total amount around 300k

Appreciate it mitigates risk but splitting this into 4 different institutions adds complexity particularly when the named account holder (not me) is well into their 80s

Thoughts appreciated

masonic

https://www.fscs.org.uk/your-claim/temporary-high-balances/

Would appear to cover: Proceeds of a deceased's estate held by their personal representative

AnotherJoe

Short term you are covered anyway for such "usual events" ( 6 months)

Mistermeaner

Thanks guys

The personal representative / executor / sole beneficiary is my dad (receiving my mum's estate) so probate and completion etc should happen quite quickly

Dad sfruggles to manage stuff and wants everything in one place .... What's the real risk of leaving 300k in nationwide vs the hassle of setting up and managing a further 3 separate banks for him ?

kev2009

I think NS&I allow for larger funds that are fully protected don't they? Maybe a option.

Kev

londoninvestor

kev2009 wrote: »

I think NS&I allow for larger funds that are fully protected don't they? Maybe a option.

Kev

Yes - fully guaranteed by the government, including anything above £85k.

So put the whole £300k in NS&I, and you don't have multiple institutions to deal with, nor any risk of losing capital.

short_butt_sweet

personally, i wouldn't worry about going temporarily over £85k with Nationwide BS.

firstly because you have the "temporary high balance" protection (covering up to £1m) for 6 months. though an estate could easily take longer than that to be sorted out.

and secondly because i'd be confident that Nationwide BS are clearly among the "too big to fail" deposit takers. implying that in practice the government would never let them collapse and go to the FSCS, but would intervene sooner to keep them afloat, with nothing in their deposit accounts being lost. (though anybody holding anything like Nationwide PIBS or similar securities - which are distinct from ordinary deposit accounts - could be wiped out.)

though NS&I is also a good option. especially for after the estate is wound up, in case your father will continue to hold a lot of cash for a while.

Malthusian

short_butt_sweet wrote: »

and secondly because i'd be confident that Nationwide BS are clearly among the "too big to fail" deposit takers. implying that in practice the government would never let them collapse and go to the FSCS, but would intervene sooner to keep them afloat, with nothing in their deposit accounts being lost. (though anybody holding anything like Nationwide PIBS or similar securities - which are distinct from ordinary deposit accounts - could be wiped out.)

Perfectly valid opinion with sound reasons to believe it, although personally I wouldn't risk £215,000 of my own money on it.

Risking £215,000 of other people's money on it (the OP is an executor) by contrast would be the act of a dribbling imbecile.

Mistermeaner wrote:

Appreciate it mitigates risk but splitting this into 4 different institutions adds complexity particularly when the named account holder (not me) is well into their 80s

Surely the named account holder is "The Executors of Mr / Mrs X".

Mistermeaner

Malthusian wrote: »

Surely the named account holder is "The Executors of Mr / Mrs X".

executor is my dad (sole beneficiary of my mums estate)

Im doing all the paperwork etc. and he's signing stuff

Based on the advice here I will arrange for the balance of the money to go to NS&I within the next 6 months

Thanks for all input