£85k saving protection - does that include ISAs?

What_time_is_it

Does the £85k protection limit include ISA accounts?
Or just "normal" savings accounts?

Say if you had £60k in an ISA and a further £60k in a saver at the same bank, would you be covered for all of that? Or just the first £85k?

And what should you do if your ISAs ever go over £85k? (not that mine do, but you never know!)

Thanks!

ColdIron

Using an ISA makes no difference

What_time_is_it said:

Say if you had £60k in an ISA and a further £60k in a saver at the same bank, would you be covered for all of that? Or just the first £85k?

Only the first £85,000 would be protected

And what should you do if your ISAs ever go over £85k? (not that mine do, but you never know!)

Split it, just as you would for any savings account

mebu60

Yes, it covers Cash ISAs but it is £85k per institution not per savings account. And some institutions cover multiple providers e.g. Goldman Sachs' FSCS protection includes Marcus and Saga Savings. 

If your savings with one institution exceed £85k then open an account with another institution. 

EthicsGradient

The £85k limit includes all accounts at that bank or institution (and that means the parent company, so, for instance, all accounts, ISA or otherwise, held at both HSBC and First Direct would be added together, and the limit applied to them).

What should you do? Well, that depends on whether you want to risk losing some of your money - which may depend on the bank you're talking about (some may still be "too big to fail", though that's not an official designation, of course). You could transfer an ISA to another institution, but you may not get as good an interest rate.

What_time_is_it

Thanks guys. So £85k per institution, including ISAs (and all accounts).

So if my ISA got to, say, £120k. What then? Split it? Transfer it to all to biggest name (e.g. HSBC)?

ColdIron

What_time_is_it said:

So if my ISA got to, say, £120k. What then? Split it?

Yes split it across organisations with different licences, be aware that some are shared, use the link below

https://www.which.co.uk/money/savings-and-isas/savings-accounts/fscs-are-my-savings-safe-aW00D9u2dt8m#tool-who-owns-who-in-the-savings-market

Transfer it to all to biggest name (e.g. HSBC)?

What would that achieve? You've just jumped from the frying pan into the fire

eskbanker

What_time_is_it said:

Thanks guys. So £85k per institution, including ISAs (and all accounts).

So if my ISA got to, say, £120k. What then? Split it? Transfer it to all to biggest name (e.g. HSBC)?

Already asked and answered above?

ColdIron said:

And what should you do if your ISAs ever go over £85k? (not that mine do, but you never know!)

Split it, just as you would for any savings account

What_time_is_it

Brill. Thanks for your time guys.
My thinking on using a big bank if we have a large amount is that the bigger the name, the less likely they are to fail. Surely all the smaller ones will go bust before the likes of HSBC, Natwest, etc?
Anyway, sounds like splitting would be the best option.
Thanks again.

mebu60

Splitting your Cash ISA when you are around £80k is a sensible approach, i.e. don't wait until it's £120k. As long as there is FSCS protection I would prioritise rate and customer service over size of institution. Have you heard of Credit Suisse, formerly one of the biggest banks on the planet? And mentioning Nat West, you know what happened with Royal Bank of Scotland? 

What_time_is_it

mebu60 said:

Splitting your Cash ISA when you are around £80k is a sensible approach, i.e. don't wait until it's £120k. As long as there is FSCS protection I would prioritise rate and customer service over size of institution. Have you heard of Credit Suisse, formerly one of the biggest banks on the planet? And mentioning Nat West, you know what happened with Royal Bank of Scotland? 

Well quite! But RBS did get full government backing. If the likes of GB Bank ran into problems, would the government bail them out? I do think that size still matters.

mebu60

What_time_is_it said:

mebu60 said:

Splitting your Cash ISA when you are around £80k is a sensible approach, i.e. don't wait until it's £120k. As long as there is FSCS protection I would prioritise rate and customer service over size of institution. Have you heard of Credit Suisse, formerly one of the biggest banks on the planet? And mentioning Nat West, you know what happened with Royal Bank of Scotland? 

Well quite! But RBS did get full government backing. If the likes of GB Bank ran into problems, would the government bail them out? I do think that size still matters.

It's your choice to prioritise size over rate if that makes you feel more comfortable. The two criteria are not always mutually exclusive either, some of the bigger boys have offered some decent rates in the past year. And there's always NS&I which is 100% guaranteed.