VIRGIN MONEY - is it safe?????

h1n1
h1n1 Posts: 14
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edited 27 January at 2:55PM in ISAs & tax-free savings
Hello
I am looking at new ISA accounts for money over £85K held in an ISA.

I have seen that Virgin Money is currently offering 5.25% , which is better than Barclays. 

The question before I open and transfer my money to Virgin Money - is it safe? Would putting all my life savings be at much greater risk than it would be staying in Barclays ISA?

The last Cash ISA was opened in December 2022, it matured in Dec 2023. So I have not yet opened an ISA in 2023/24. 

I could open a Virgin Money ISA and put 85K for the tax year 2023/24 and in April the remaining amount put in another ISA (with Barclays - as I assume i wouldn't be able to open another ISA with Virgin and if I did it wouldn't be protected so therefore might as well have put it all in the one account?). I have looked at Fitch and they have I think updated it now to BBB+ with a positive outlook ..

I am wondering whether Virgin Money is a safe and robust company where it would be safe / very unlikely that they will collapse! 

If Virgin Money is 'safe' and a robust company, it may be better to put it all into the 5.25% account ... However, here is another query, what is the better way to do it? 

Barclays offers premier customers a slightly better rate (4.45%) for 18 months and (4.70%) for 12 months). 
Virgin Money is a better rate for 12 months, over Barclays. But if I were to put all the money into Barclays at 4.45% over 18 months, in 12 months I suspect BoE would have lowered the base rate, causing Barclays to reduce the saving rates.... 
Therefore, would it be wiser to lock in for 18 months, even though it's lower than a 5.25% account for 12 months?

I would appreciate input and thoughts about this as I am quite stuck .......
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Comments

  • born_again
    born_again Posts: 13,565
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    All Uk banks have passed the FCA tests.
    The odds on any of them going bust are so small as not to even be worth worrying about.

    If you are really worried, then put £85K in the isa, & put the rest in another bank savings account.
    Life in the slow lane
  • refluxer
    refluxer Posts: 2,535
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    Just in case you hadn't spotted it, you'll need a current account with Virgin in order to open that 1 year fixed rate 'exclusive' ISA @ 5.25%.

    The £85k FSCS protection covers your balance and any interest due on it, so it makes sense to put in less than that if you want to play it safe - you'd be looking at closer to £80k @ 5.25% for a year to ensure you're fully protected and covered for the interest it'll earn.

    Personally, I wouldn't risk saving more than the FSCS limit with any one financial institution, regardless of their perceived chances of getting into trouble.
  • amanda1024
    amanda1024 Posts: 234
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    You know you can open two different ISAs now, you don’t have to wait until April? That way you can put c. £80k in the top interest one, the rest in the next best
  • h1n1
    h1n1 Posts: 14
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    You know you can open two different ISAs now, you don’t have to wait until April? That way you can put c. £80k in the top interest one, the rest in the next best
    thanks for your suggestion; I was thinking of doing this.. 
    I can only open 1 ISA each financial year and whilst I can for 2023/24, I will have to wait until April 2024 before I can open another. 
    The issue here is ... is it more likely than not , by the time April comes, interest rates will have reduced further ... speculation is BoE will start reducing rates in 2024. 
    As a result , is having all money in the Virgin Money a) safe and b) if safe, better having in a 5.25% for 12 months , or in Barclays at 4.45% for 18 months. 

    Ahhhhhhhhhhhhh 
  • refluxer
    refluxer Posts: 2,535
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    edited 27 January at 3:59PM
    h1n1 said:
    You know you can open two different ISAs now, you don’t have to wait until April? That way you can put c. £80k in the top interest one, the rest in the next best
    thanks for your suggestion; I was thinking of doing this.. 
    I can only open 1 ISA each financial year and whilst I can for 2023/24, I will have to wait until April 2024 before I can open another. 
    That's not correct - there is no limit to the number of cash ISAs you can open each tax year if you're funding them with transfers from ISAs containing subscriptions from previous tax years.

    The 'one cash ISA' restriction only applies to cash ISAs funded by subscriptions from the current tax year - it doesn't limit the number of cash ISAs you can open but does mean that you can only pay new subscriptions into one cash ISA at any one time. That is due to change from 6th April, after which you'll be able to pay new subscriptions into as many different cash ISAs as you like.
  • h1n1
    h1n1 Posts: 14
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    edited 27 January at 4:35PM
    refluxer said:
    h1n1 said:
    You know you can open two different ISAs now, you don’t have to wait until April? That way you can put c. £80k in the top interest one, the rest in the next best
    thanks for your suggestion; I was thinking of doing this.. 
    I can only open 1 ISA each financial year and whilst I can for 2023/24, I will have to wait until April 2024 before I can open another. 
    That's not correct - there is no limit to the number of cash ISAs you can open each tax year if you're funding them with transfers from ISAs containing subscriptions from previous tax years.

    The 'one cash ISA' restriction only applies to cash ISAs funded by subscriptions from the current tax year - it doesn't limit the number of cash ISAs you can open but does mean that you can only pay new subscriptions into one cash ISA at any one time. That is due to change from 6th April, after which you'll be able to pay new subscriptions into as many different cash ISAs as you like.
    oh that is interesting to know - thank you! 

    So, if I were to transfer 85K into a virgin money account at 5.25% , I can also open another ISA with another provider who also has a good rate of fixed interest and transfer the rest of the money held in the current ISA from previous years?

    Would I be able to continue to top-up the second ISA?
  • surreysaver
    surreysaver Posts: 3,977
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    All Uk banks have passed the FCA tests.
    The odds on any of them going bust are so small as not to even be worth worrying about.

    If you are really worried, then put £85K in the isa, & put the rest in another bank savings account.
    Remember Northern Rock? Now called Virgin Money?
    I consider myself to be a male feminist. Is that allowed?
  • sheslookinhot
    sheslookinhot Posts: 1,940
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    All Uk banks have passed the FCA tests.
    The odds on any of them going bust are so small as not to even be worth worrying about.

    If you are really worried, then put £85K in the isa, & put the rest in another bank savings account.
    Remember Northern Rock? Now called Virgin Money?
    That post is misleading.

    Virgin Money are NOT Northern Rock. Virgin Money purchased the “good” parts of Northern Rock from the Treasury.
    Mortgage free
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  • eskbanker
    eskbanker Posts: 29,817
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    All Uk banks have passed the FCA tests.
    The odds on any of them going bust are so small as not to even be worth worrying about.

    If you are really worried, then put £85K in the isa, & put the rest in another bank savings account.
    Remember Northern Rock? Now called Virgin Money?
    No Northern Rock savers lost out when it was bailed out by the government, but the associated events led to the tightening of liquidity controls, etc, that significantly reduced the chances of that happening again, hence your need to go back more than 15 years to come up with an example....
  • refluxer
    refluxer Posts: 2,535
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    h1n1 said:
    refluxer said:
    That's not correct - there is no limit to the number of cash ISAs you can open each tax year if you're funding them with transfers from ISAs containing subscriptions from previous tax years.

    The 'one cash ISA' restriction only applies to cash ISAs funded by subscriptions from the current tax year - it doesn't limit the number of cash ISAs you can open but does mean that you can only pay new subscriptions into one cash ISA at any one time. That is due to change from 6th April, after which you'll be able to pay new subscriptions into as many different cash ISAs as you like.
    So, if I were to transfer 85K into a virgin money account at 5.25% , I can also open another ISA with another provider who also has a good rate of fixed interest and transfer the rest of the money held in the current ISA from previous years?
    Yes, provided the existing ISA allows partial transfers out and the Virgin ISA allows partial transfers in.

    If you're going to go to the trouble of splitting your current ISA to stay under the FSCS limit, then I would put in sufficiently less such that you don't face the same problem in a year's time. Eg. £75k would give you a couple of years headroom for interest or possibly more if rates fall.

    h1n1 said:
    Would I be able to continue to top-up the second ISA?
    Yes, provided you haven't paid new subscriptions from the current tax year into another cash ISA.

    Bear in mind that most fixed rate cash ISAs have a limited window for funding (usually anything up to a month) so you'd lose any unused 2023-24 allowance once that time is up 

    There are a few exceptions to this however - Barclays and Shawbrook are two providers who allow you to contribute throughout the duration of the fix.
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