What happens if your bank goes bust?

reveller

So, I know you can get £85k back as compensation but I have been wondering about the day after. Would you be left without any money until then? Seems like very poor protection for poorer people.

Thrugelmir

Why do you believe that your bank will go bust? 

eskbanker

reveller said:

So, I know you can get £85k back as compensation but I have been wondering about the day after. Would you be left without any money until then? Seems like very poor protection for poorer people.

You don't "get £85k back as compensation", you get your balance back, up to £85K!  FSCS aims to do so within 7 days, which is way better than it used to be - what sort of turnaround do you believe is achievable?

cattie

Surely if you have enough in the bank to be covered by the £85k FSCF protection you can't be poor enough not to have access to any money for the next few days?

Sensory

reveller said:

So, I know you can get £85k back as compensation but I have been wondering about the day after. Would you be left without any money until then? Seems like very poor protection for poorer people.

Don’t put all your eggs in one basket. Spread your money across multiple institutions because the chances of all of them going bust at the same time is much smaller.

Credit cards are also handy for short-term borrowing.

dunstonh

Seems like very poor protection for poorer people. 

£85k per bank.   What is your definition of poor people?

Daliah

eskbanker said:

reveller said:

So, I know you can get £85k back as compensation but I have been wondering about the day after. Would you be left without any money until then? Seems like very poor protection for poorer people.

You don't "get £85k back as compensation", you get your balance back, up to £85K!  FSCS aims to do so within 7 days, which is way better than it used to be - what sort of turnaround do you believe is achievable?

To be fair, the FSCS refer to your money as 'compensation'. Strange but true.

Daliah

cattie said:

Surely if you have enough in the bank to be covered by the £85k FSCF protection you can't be poor enough not to have access to any money for the next few days?

You don't have to have a lot of money in the bank to be covered by FSCS. Anything from 1p would be covered, up to £85k max.

eskbanker

Daliah said:

eskbanker said:

reveller said:

So, I know you can get £85k back as compensation but I have been wondering about the day after. Would you be left without any money until then? Seems like very poor protection for poorer people.

You don't "get £85k back as compensation", you get your balance back, up to £85K!  FSCS aims to do so within 7 days, which is way better than it used to be - what sort of turnaround do you believe is achievable?

To be fair, the FSCS refer to your money as 'compensation'. Strange but true.

Given what the 'C' stands for in 'FSCS', it's perhaps not that strange!  However, the term is a bit ambiguous, in that it's often used to describe an additional sum awarded over and above direct loss recovery, so I felt it was worth clarifying that here it's very much the latter rather than the former, and also that it's not a fixed £85K but the actual balance, just in case OP (or anyone else) had the wrong end of the stick....

masonic

Having at least two bank accounts, at least one of which with a major provider, alongside a credit card, would be adequate protection for your immediate spending needs. Most likely the failed bank would be taken over or propped up, leading to only a short loss of facilities, but it's a hypothetical at this point because no major current account provider has gone bust.

Uxb1

and nor would it be allowed to
If one of the big ones was likely to go bust HMG would use its emergency powers to nationalise it overnight.
(Much as they did when the aero engine maker Rolls Royce went bust in 1971)

While on here we concentrate on the retail/consumer side of a bust a far bigger problem would be the commercial side.
Credit card companies, supermarkets, fuel companies, building societies, wholesalers, train, bus and airlines, energy companies etc all have accounts with the big banks just like we do
Fairly obviously if a major bank went bust then so would a considerable number of these with immediate effect if they were unable to operate and the UK economy would largely cease within days.
At which point we all would have far bigger problems than worrying about our up to £85K with them.
So all in all a major bank is simply not going to be allowed to go bust and close doors.