Savings platforms and FSCS

GoldenOldy

Good Afternoon,

I am looking at savings platforms. HL caught my eyes, as they seem to be swifter than raisin when moving money from the holding account to a particular savings account.
I have read a which report which I dont quite understand re fscs coverage.
Are they saying the money held in the holding account as such (before its allocated) may be at risk if the platform goes bust, or do they mean with the individual accounts with the different providers (which is rather alarming if so!)
I have put an excerpt of the text below.

Many Thanks for reading this, and even more if you happen to know and can reply.

Usually, when you deposit money into a savings account, your funds of up to £85,000 will be covered by the Financial Services Compensation Scheme in case the bank goes bust. But when you save via a savings platform, things can get a little more tricky.

If deposits are held in your name, or on trust, where you remain absolutely entitled to the funds, you could still claim up to £85,000 in compensation.

However, if the savings platform itself fails - as opposed to a bank or building society - the FSCS says they generally won't be able to compensate, as the service provided by the savings platform is not a regulated activity.

masonic

They only refer to money held within their savings platform that is not currently in the possession of one of their savings providers.

GoldenOldy

Thankyou Masonic. I was a little alarmed!

miss_curly

@Masonic

(Still on the learning curve here)  ... Just reading above posts, is money in the holding account with HL not protected? I read from another thread that you had said you regularly 'sweep' uninvested money ... is this why?

What is the attraction to HL rather than Raisin if there is any risk? I'd like to understand what the bigger pull is to HL in this instance.

P.S thanks for all your help and guidance

masonic

miss_curly said:

@Masonic

(Still on the learning curve here)  ... Just reading above posts, is money in the holding account with HL not protected? I read from another thread that you had said you regularly 'sweep' uninvested money ... is this why?

What is the attraction to HL rather than Raisin if there is any risk? I'd like to understand what the bigger pull is to HL in this instance.

P.S thanks for all your help and guidance

HL has Client Money permission, and holds client money within ring-fenced accounts with FSCS protected banks. The main reason not to hold money in a holding account is it generally earns a low rate of interest.

If HL fails, then the administrators would be responsible for reconciling the client money accounts and returning money to clients. Any shortfall or costs associated with this is subject to FSCS protection, but it can be a very slow process.

Eyeful

GoldenOldy
Below is a link to the HL Active Savings Account, which explains in detail the protections there are for your money.
I hope it will help to set your mind at rest. It is long but worth reading. 
https://www.hl.co.uk/savings/are-your-savings-safe

Remember HL is in the FTSE 100, so one of the largest companies in the UK.

masonic

Eyeful said:

GoldenOldy
Below is a link to the HL Active Savings Account, which explains in detail the protections there are for your money.
I hope it will help to set your mind at rest. It is long but worth reading. 
https://www.hl.co.uk/savings/are-your-savings-safe

Remember HL is in the FTSE 100, so one of the largest companies in the UK.

Even though the thread has been resurrected from January, this might still be helpful to someone.

aroominyork

And if Barclays, where HL cash hub funds are held, fails, then it's Goodnight Vienna. 

Eyeful

aroominyork said:

And if Barclays, where HL cash hub funds are held, fails, then it's Goodnight Vienna. 

Both of them going down the tubes at the SAME TIME would  suggest a major market crash again!
Lets hope that does not happen soon. 

miss_curly

@Eyeful @masonic @aroominyork ....... thanks folks 

Do people that are moneywise put 80'ish K in an institution or would they split it down further? If there was a large sum involved to distribute I mean

poseidon1

Eyeful said:

GoldenOldy
Below is a link to the HL Active Savings Account, which explains in detail the protections there are for your money.
I hope it will help to set your mind at rest. It is long but worth reading. 
https://www.hl.co.uk/savings/are-your-savings-safe

Remember HL is in the FTSE 100, so one of the largest companies in the UK.

As well to remember that HL will in due course drop out of the quoted stockmarket, having been acquired by private equity.   

Such acquisitions tend to be allied to substantial debt financing arrangements that impact on the businesses' future profitability for tax purposes.  What (if anything) this means for HL's  future services remains to be seen.