Savings Greater Than FSCS Limit

dharm999

I think you should really take some professional advice as you have substantial assets and in all probability a very large IHT bill to pay for you or your wife.  Wondering which bank is safe when you have a joint estate that is probably multi million pounds seems to me, to be missing the key point.  If I were in your position I wouldn’t worry too much about which bank I had my money in and start spending it, whilst i could.  

Sorry to hear about your wife’s stroke, maybe that could be a spur to get things sorted, e.g. is your current house fit for purpose and suitable for the long term, especially if there are health issues to consider, are there things that you both wants to do, but we’re putting off, and so on.  Take the opportunity now, while you can to have your long term plan sorted.  If you already have all that sorted, then great, get on with spending your hard earned money and enjoy things while you can

Shylock_249

jaceyboy said:

NS&I is the way to go imo, full protection, maybe not the best interest rate but piece of mind at an older age and just one account instead of 14?

Thanks,

Yes, I've been considering this. I could open a joint (taxed) account and individual ISA accounts for each of us. It would certainly be easier to administer when one of us passes on.  If we took the money out of ISAs and just paid it into the joint account - I might be wrong - one of other of us wouldn't have to go through Probate.  That would reduce our current account holdings of 20 (22 on 6 Apr).

It would take me over a year to complete it because all but two accounts are fixed One Year Accounts.

It's a pity that couples when they reach a certain age they cannot merge their ISAs if only so they could avoid Probate.

Shylock_249

dharm999 said:

I think you should really take some professional advice as you have substantial assets and in all probability a very large IHT bill to pay for you or your wife.  

Thanks!

But I thought there was no IHT liability between husband and wife?  (When the last of us goes I wouldn't be concerned about IHT).

I just assumed that when one of us goes, if we had only joint accounts, it would just be a matter of presenting a death certificate and the bank would rename the account. There would be no need for probate and no need to declare assets for IHT?

Am I correct?

Thanks again.

kjs31

I have a similar scenario currently and have spread my money between banks and building societies to keep below the limit and also to move accounts as and when other banks have offered better rates. I have gone over the 85k limit a little in some cases, mostly keeping below 90k but I recognise that I could, in theory, lose the small(ish) amount over, although I believe it to be unlikely. Would I go 9k over? Probably, but it depends on your attitude to risk. I believe the risk to be small and unlikely so I don’t sweat it, but would I put all of my eggs in the same basket and put it all in a single account? No. I’m somewhere in between when it comes to risk. It does require more effort to run multiple accounts though and thank God for spreadsheets. 

Beddie

As you don't seem to need the money and the amount of interest is largely irrelevant too, just stick it all (or most) in NS&I as someone said above. Far less admin and hassle. As someone also said, spend lots of it! The finest foods, luxury travel and anything else you care to mention. Not easy when you've been a saver, but do please try to enjoy it.

Regarding your original question, there's an extremely tiny chance of the likes of HSBC, Lloyds, Nationwide etc. going under. I'd be happy to keep very large sums in any of those, and others. However, you may worry, in which case NS&I is the safest place.

Swipe

I'd advise not to put all your eggs in the NS&I basket. While it is very safe there, they are known for their less than stellar customer service and will have you jumping through lots of unnecessary, time wasting hoops (lots of snail mail and forms) if something goes wrong or you get locked out your account.

dharm999

Shylock_249 said:

dharm999 said:

I think you should really take some professional advice as you have substantial assets and in all probability a very large IHT bill to pay for you or your wife.  

Thanks!

But I thought there was no IHT liability between husband and wife?  (When the last of us goes I wouldn't be concerned about IHT).

I just assumed that when one of us goes, if we had only joint accounts, it would just be a matter of presenting a death certificate and the bank would rename the account. There would be no need for probate and no need to declare assets for IHT?

Am I correct?

Thanks again.

You’re right in that there is no IHT on the transfer to a spouse, but you are potentially giving a large six figure sum in tax when you could mitigate it.  Do you have charities that you both support, as gifts to charities can reduce the value of your estate subject to IHT or reduce the IHT rate.  If you gave all your esta to charity, then I think there would be no IHT to pay, something to think about if you don’t want to give your estate to relatives or other people.

LHW99

Or get a very large joint life, index linked annuity, with 100% survivor protection and enjoy the extra. If you are using savings it would be a purchased life one (a bit niche now I believe) and part would be regarded as return of capital, so slightly less income tax. Also protects against longevity, and marble losing!

Bostonerimus1

People might have occasion sometime in their life to deal with large deposits ie over 85k. This might be from an inheritance or a house sale. So let's say you sell a house that you've paid off so you end up with 300k in essentially cash that you want to have access to so you can but another home...maybe you are downsizing. Where do people put that cash. Do they split it up between several accounts, use NS&I or are their specialized accounts with a higher level of insurance than the FCSC limit?

eskbanker

Bostonerimus1 said:

People might have occasion sometime in their life to deal with large deposits ie over 85k. This might be from an inheritance or a house sale. So let's say you sell a house that you've paid off so you end up with 300k in essentially cash that you want to have access to so you can but another home...maybe you are downsizing. Where do people put that cash. Do they split it up between several accounts, use NS&I or are their specialized accounts with a higher level of insurance than the FCSC limit?

FSCS has a temporary high balances provision exactly for such life events, offering protection of up to £1m for up to six months:

https://www.fscs.org.uk/making-a-claim/claims-process/temporary-high-balances/