85k limit, how important is it?

Albermarle

A good analysis.
Out of interest where would you place providers like Chase, or Marcus, backed by huge US banks ?
I also have thought that a smaller savings provider that was an offshoot of a household name, like Ford Money or Tesco bank, would be pretty safe as the Mothership would come to the rescue to protect their brand.

Thumbs_Up

I no longer have a Lloyds bank account. But at one time together I have with the Lloyds Banking Group - 

Scottish widows pension.

Halifax stocks and shares account.

Lloyds bank shares.

Cash in TSB.

Cash in RBS.

eskbanker

Thumbs_Up said:

I no longer have a Lloyds bank account. But at one time together I have with the Lloyds Banking Group - 

Scottish widows pension.

Halifax stocks and shares account.

Lloyds bank shares.

Cash in TSB.

Cash in RBS

Not sure what your point is, but pensions and investments have separate FSCS protections, LBG shares don't have any, and the last two are nothing to do with Lloyds Banking Group!

Thumbs_Up

eskbanker said:

Thumbs_Up said:

I no longer have a Lloyds bank account. But at one time together I have with the Lloyds Banking Group - 

Scottish widows pension.

Halifax stocks and shares account.

Lloyds bank shares.

Cash in TSB.

Cash in RBS

Not sure what your point is, but pensions and investments have separate FSCS protections, LBG shares don't have any, and the last two are nothing to do with Lloyds Banking Group!

Always look forward to your sassy comments and your Thumbs_Up friends.

My point is some people worry if they go 1 pence over the 85k protection limit. The other point is if someone has very significant sums of money and investment under one umbrella, and that umbrella breaks, you are going to get rinsed to a......point.

Oh, didn’t Lloyds owned Bank of Scotland and TSB at one time or another?    

 

jimjames

The thread title makes no distinction but I think it's important to also consider cash vs investments. The £85k limit is of much less importance for investment products compared to cash and in many cases is irrelevant in terms of the balance held. 

jimjames

Thumbs_Up said:

eskbanker said:

Thumbs_Up said:

I no longer have a Lloyds bank account. But at one time together I have with the Lloyds Banking Group - 

Scottish widows pension.

Halifax stocks and shares account.

Lloyds bank shares.

Cash in TSB.

Cash in RBS

Not sure what your point is, but pensions and investments have separate FSCS protections, LBG shares don't have any, and the last two are nothing to do with Lloyds Banking Group!

Oh, didn’t Lloyds owned Bank of Scotland and TSB at one time or another?    

Lloyds, BoS and Halifax are all still part of the same group. TSB is the only part sold off. Bank of Scotland and RBS are completely different companies.

eskbanker

Thumbs_Up said:
My point is some people worry if they go 1 pence over the 85k protection limit. The other point is if someone has very significant sums of money and investment under one umbrella, and that umbrella breaks, you are going to get rinsed to a......point.

But the point is that even if you had a pension, investments and cash all within the same group, your FSCS protection isn't limited to £85K in total, so (within the context of this thread's subject) each should be considered in isolation rather than lumping them together.

hallmark

IMO if you want a quick and dirty 100-ft view of how risky something is, ask yourself how many people it might affect.

This Govt & all Govts care far more about votes than any notion of fairness.  They'll do whatever they think will get them voted in.

So you are FAR safer having >£85K in a bank that has millions and millions of (voting) customers than you are in a niche outfit that would only affect relatively few people if it went bust.

However there are other factors than straightforward risk, such as how well you'd sleep and how long it would take the Govt to step in, if you did have way above £85k somewhere huge that went busto.

IMO the FSCS limit is long overdue a raise, if nothing else taking it up to a nice round £100k would be a start.  But not enough voters have more than £85k saved for that to be high on any Govt's priority list.

eskbanker

hallmark said:

IMO the FSCS limit is long overdue a raise, if nothing else taking it up to a nice round £100k would be a start.

But for those such as OP, with more than £85K in cash savings, it's easy to split that pot across multiple providers, so it's straightforward to work within the existing limit.

Albermarle

hallmark said:

IMO if you want a quick and dirty 100-ft view of how risky something is, ask yourself how many people it might affect.

This Govt & all Govts care far more about votes than any notion of fairness.  They'll do whatever they think will get them voted in.

So you are FAR safer having >£85K in a bank that has millions and millions of (voting) customers than you are in a niche outfit that would only affect relatively few people if it went bust.

However there are other factors than straightforward risk, such as how well you'd sleep and how long it would take the Govt to step in, if you did have way above £85k somewhere huge that went busto.

IMO the FSCS limit is long overdue a raise, if nothing else taking it up to a nice round £100k would be a start.  But not enough voters have more than £85k saved for that to be high on any Govt's priority list.

Although what may well happen if a smaller provider was in trouble, is that the Bank of England would twist arms to get a bigger/more stable provider to take them over. Better than all the bad publicity and having to pay out the FSCS mone.