Getting savings together of over £85,000

Hallux

If you need to bring various savings together (e.g. cashing in Stock Market funds)  to pay towards your new home and they total over £85,000 then how can you do this safely with a bank or building society when they only cover you with protection for £85,000?

canaldumidi

You can have upto £1M protected by FSCS.

https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/

Hallux

(bank or building society current account I meant)

Hallux

Thank you very much canaldumidi.  That is a relief and very reassuring to me.

user1977

You don't need to have them all in one account at any point anyway.

Slithery

canaldumidi said:

You can have upto £1M protected by FSCS.

https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/

Only if the money has come from a recent sale of your main residence. Cashing in savings doesn't count.

canaldumidi

https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/

Real estate transactions (property purchase, sale proceeds, equity release - relating to your main residence only. This does not have to be a UK property but must relate to your main residence).

AdrianC

Hallux said:

If you need to bring various savings together (e.g. cashing in Stock Market funds)  to pay towards your new home and they total over £85,000 then how can you do this safely with a bank or building society when they only cover you with protection for £85,000?

In the unlikely event a major UK bank does go bust, I'm not convinced the FSCS cap is going to be terribly great comfort or even particularly relevant.

Firstly, the gov't are unlikely to actually let a major UK bank go pop. As with the 2008 crisis, they'd be more likely to bail the bank itself out.

Even if they did, the political fallout from leaving people out of pocket would be too great - the government would likely just cover losses anyway. It's what they did last time, when the Icelandic banks went under.

Finally, the delays that would inevitably happen between the failure and the receipt of coverage would almost certainly scupper the purchase anyway - and that's if the purchase had survived the market turmoil that had brought the bank down anyway.

UK FSCS protection is almost certain to be reviewed at some point in the near future - remember, the reason for the slightly odd £85k figure is that it's actually €100k, because the FSCS is an EU-mandated scheme...

GDB2222

AdrianC said:

Hallux said:

If you need to bring various savings together (e.g. cashing in Stock Market funds)  to pay towards your new home and they total over £85,000 then how can you do this safely with a bank or building society when they only cover you with protection for £85,000?

In the unlikely event a major UK bank does go bust, I'm not convinced the FSCS cap is going to be terribly great comfort or even particularly relevant.

Firstly, the gov't are unlikely to actually let a major UK bank go pop. As with the 2008 crisis, they'd be more likely to bail the bank itself out.

Even if they did, the political fallout from leaving people out of pocket would be too great - the government would likely just cover losses anyway. It's what they did last time, when the Icelandic banks went under.

Finally, the delays that would inevitably happen between the failure and the receipt of coverage would almost certainly scupper the purchase anyway - and that's if the purchase had survived the market turmoil that had brought the bank down anyway.

UK FSCS protection is almost certain to be reviewed at some point in the near future - remember, the reason for the slightly odd £85k figure is that it's actually €100k, because the FSCS is an EU-mandated scheme...

We are seeing this playing out right now, with energy companies. The protection scheme works fine when one small company goes wrong, but it can’t help when the whole sector is in trouble.

user1977

GDB2222 said:

AdrianC said:

Hallux said:

If you need to bring various savings together (e.g. cashing in Stock Market funds)  to pay towards your new home and they total over £85,000 then how can you do this safely with a bank or building society when they only cover you with protection for £85,000?

In the unlikely event a major UK bank does go bust, I'm not convinced the FSCS cap is going to be terribly great comfort or even particularly relevant.

Firstly, the gov't are unlikely to actually let a major UK bank go pop. As with the 2008 crisis, they'd be more likely to bail the bank itself out.

Even if they did, the political fallout from leaving people out of pocket would be too great - the government would likely just cover losses anyway. It's what they did last time, when the Icelandic banks went under.

Finally, the delays that would inevitably happen between the failure and the receipt of coverage would almost certainly scupper the purchase anyway - and that's if the purchase had survived the market turmoil that had brought the bank down anyway.

UK FSCS protection is almost certain to be reviewed at some point in the near future - remember, the reason for the slightly odd £85k figure is that it's actually €100k, because the FSCS is an EU-mandated scheme...

We are seeing this playing out right now, with energy companies. The protection scheme works fine when one small company goes wrong, but it can’t help when the whole sector is in trouble.

To be fair, if the whole banking system were in meltdown I'm not sure how many people would be keen to proceed with buying a house... 

Keep_pedalling

There is always the option of using NS&I which offers unlimited security.