Protection of stocks and shares in a HL S&S ISA

bargainhunter888

Hi All,
The news about collapse of banks and potential shockwaves are giving me a little concern - rightly or wrongly I'm not sure.
however in haste a couple of years ago during COVID, I opened an S&S ISA as I was told keeping my cash in Banks is bad (now I realise)

I invested in some:
UK Stocks - M&S & Shell
US Stocks - Apple and other large caps
Majority of My holdings are in SWDA - ETF.

what I wanted to know is ELI5 terms is how safe is my money and also whether any of the 85,000 protection applies?
I've read that if H&L go down, its least of my worries, but also that investments are separate from them, so nothing should happen.
I understand if the company goes bust from a shares point of view - this is pretty clear! 
US shares - does this differ at all to UK shares as they are held seprate?

My main concern is whether to carry on investing into SWDA, or should I invest into something else that is similar such as VRWL
is it an issue if Blackrock go down only etc?

Thanks

Albermarle

Blackrock and Vanguard are not banks, so are nowhere near as vulnerable as banks to these kind of issues.
Probably would take a catastrophic global event, like a nuclear war, in which case you wouldn't be worrying about SWDA !

bargainhunter888

you mention catastrophic event, you never know! things could escalate, in which case money would be no use.
so basically there is no such compensation scheme for ETF, however if HL were ever to fold, it would still be protected? 

been really into saving for retirement, so i could just split the investment across banks if it's less risky with the interests keeping reasonable.

wmb194

Don't panic. The world isn't ending.

The same as with HL, even if Vanguard and Blackrock went bust the assets of their ETFs would be held separately from the assets of the business and you would continue to be the beneficial owner. The FSCS for investments effectively covers you for maladministration, fraud and, IIRC, costs related to winding up brokers and transferring your holdings elsewhere.

Albermarle

you mention catastrophic event, you never know! things could escalate, in which case money would be no use

So would not be much point worrying about compensation then !

been really into saving for retirement, so i could just split the investment across banks if it's less risky with the interests keeping reasonable.

Savings are not investments.

You get interest from savings. From investments you hopefully get a positive return and dividends.

For savings you should not keep more than £85K with any institution, as this is the compensation limit.

For investments if you stick to the mainstream and a reputable platform, I would not worry about it.

jimjames

bargainhunter888 said:

been really into saving for retirement, so i could just split the investment across banks if it's less risky with the interests keeping reasonable.

For retirement ie a very long term time horizon putting money into savings rather than investments is a bad idea as you're likely to lose out to inflation over a period of decades so investing is less risky in that respect.

bargainhunter888

I understand that, but hence the worry ha, as the value of my investments will compound it's going to be a decent value and I'd want to mitigate the risks accordingly

ChesterDog

Albermarle said:

For savings you should not keep more than £85K with any institution, as this is the compensation limit.

The exception being NS&I, of course, where the entire balance is safeguarded.

Steve_666_

I think I read deep in the II small print that if you have greater than £85k in cash in their products, SIPP, ISA etc, then the excess it is at risk if the underlying institution (Nat West I think in the case of II) went belly up