Where to put £90,000 so it is protected under FSCS Instant Access/Current accounts only

badger09

SusanSpain said:

PLEASE DON’T SHOOT THE MESSENGER, I am looking for practical advice to help my elderly father!

OK – I have recently been able to have access to my father’s financial affairs as I have become his full time carer.

He has £300,000 spread mainly over;

·        Instant Access Savings Accounts

·        Current Accounts (Bank and building societies)

·        ISA’s

·        Stocks and Shares (very small portfolio, but they pay dividends regularly.)

My concern is:

I am aware of the FSCS scheme if a financial institution went bust overnight… that he would be protected up to £85,000 PER Institution/Entity. (I know that he is only protected for one amount to this sum if there are sister companies within the group and he has his money spread about and the only way to get the full £85,000 is to place a maximum of this amount with other institutions.)

So….

My question is…

Where to do move the ‘spare’ money to as there is one bank he has at least double the protection currently offered.
We are talking of at least £90,000

I know we could put a little here and a little there in his other accounts that are under the £85,000 but there is still going to be around this sum residue.

FEEDBACK PLEASE on banks, building societies etc that he could put his money in, where it is protected by the FSCS scheme…

We understand savings are pretty much zero at present, but as long as it is safe that is his primary concern.

He is 90 years old and does not want to invest in any long term products (bonds, etc)

He just wants an instant access type account.

He is already with:

Halifax, Post Office, Nat West, Nationwide

He would prefer a high street type bank where he can walk in and not online (he is suspicious of internet banking.)
We do have a Lloyds bank & an HSBC in our local town and I think there is also branches of:

Barclays, Cheltenham & Gloucester.

There is also a Santander, but he closed all his accounts with them for some reason and refuses to go back.

I guess my question is, which of the above choices might be best for him and would he get any interest at all on any of their accounts at present. (But must be Instant Access as I say.)

Thanks for any input.

The simplest solution would be NS&I, which has no such £85k limit. However, he couldn't just 'walk in'. Otherwise, just split it between Lloyds & HSBC.  

Zanderman

steampowered said:

It is important to have a healthy attitude to risk. Don't search for zero risk- it's impossible. Inflation is eroding his capital each year, for example.

It isn't really practical to get FSCS protection for that type of amount, and it is also a bit meaningless - noone's ever had to rely on FSCS protection, even during a recession triggered by banks collapsing.

If this money is intended to be saved for the long term, I would suggest building stocks and shares.  Over the long term that presents a lower risk to capital over the long term than savings accounts - where inflation is eroding capital each year.

OP isn't asking for advice on risk. Just for easy access accounts.  And with FSCS cover.  For someone aged 90.

Not sure why you think it isn't "really practical to get FSCS protection for that type of amount".  

It's completely practical.  Dead easy in fact.  A spread over several banks is not at all difficult. Or NS&I gives full cover.

Or why you think FSCS is 'meaningless' because  it's never been used. It exists for a reason - in case it needs to be relied on.  That's the whole point of it.  

colsten

NottinghamKnight said:

Which banks allow access without PoA just curious.

Barclays, for instance. Or Santander. Or Halifax. Or google.........

Zanderman said:

You will, as Colsten says above, need PoA to open new accounts in his name. 

Actually, opening new accounts in the donor's name is one of the activities you cannot do with all the financial institutions. Don't ask me why, but I have seen countless T&Cs which exclude the opening of new accounts with a POA. 

colsten

steampowered said:

It is important to have a healthy attitude to risk. Don't search for zero risk- it's impossible. Inflation is eroding his capital each year, for example.

It isn't really practical to get FSCS protection for that type of amount, and it is also a bit meaningless - noone's ever had to rely on FSCS protection, even during a recession triggered by banks collapsing.

If this money is intended to be saved for the long term, I would suggest building stocks and shares.  Over the long term that presents a lower risk to capital over the long term than savings accounts - where inflation is eroding capital each year.

Reading this, I have difficulty believing my eyes 🥺🥺🥺🥺

Of course it is practical, and prudent, to get FSCS protection for the full amount.

It is also anything but meaningless.

Countless people have benefited from FSCS protection, including myself and several other regular forumites. For example, when yet another Credit Union went tits up. Just alone in 2018/19,  FSCS paid a total of £473m in compensation to 425,760 customers of failed firms. 

As to saving for the long term: the owner of the money is a 90 year-old gentleman. I think we should all respect his wishes, even if we ourselves might have made different choices, and even if it means he might not get the maximum return for his money. He will have his reasons for his choice,

SusanSpain

Colston: I have in place LPA for financial affairs as/when it becomes necessary to use them. But currently my father still has capacity and has asked for my help... 

SusanSpain

Thanks Xylaphone.. 

SusanSpain

NOttinghmanight, he just wants it to be safe, as he lost £10K previously when he was with a financial institution that went bust and he was over the FSCS limit... 

SusanSpain

Steampowered... My father has had to use the FSCS protection before... so I am not sure why you say it would not be available? (As long as he has his money spread over various entities ) 

SusanSpain

Whitesmith… Is this because NS&I is a government based bank? Please can you adivse more.

He has at least £40k of premium bonds, which pay out now and again and I noticed this is NS&I, is this the same thing?

Would Income Bonds or Direct Saver be the better product for him? I see there is also an Investment Account.

phillw

steampowered said:

It isn't really practical to get FSCS protection for that type of amount, and it is also a bit meaningless - noone's ever had to rely on FSCS protection, even during a recession triggered by banks collapsing.

Haven't they?

https://en.wikipedia.org/wiki/Financial_Services_Compensation_Scheme#History
"The FSCS came into existence in 2001 and replaced former multiple schemes. Between 2001 and 2006 the scheme paid out close to 1 billion pounds in compensation. In the period from 2006 to 2011 the financial crisis resulted in compensation of over 26 billion pounds being paid out by the FSCS."

https://fscs.org.uk/uploaded_files/Publications/Annual_Reports/annual-report-2011-12.pdf
"When I joined FSCS in 2006, the organisation had paid out in its first five years less than £1bn in compensation to a relatively small number of consumers. More than half of that compensation related to insurance claims on failed providers. Just over a year into the role, the run on Northern Rock happened. And then, a year later, FSCS was called upon to deal with the bank failures of 2008/09."