Is Hargreaves Lansdown Cash ISA protected by FSCS

BenTa

Hello everyone

I would like to move my life savings, about 7,000, from my very low interest rate bank into a better but secure Cash ISA provider. Hargreaves Lansdown currently gives a high Interest rate of 4.55% and it seems a good company from what I read about. However, I am totally confused whether my savings will be protected by FSCS or not. According to Hargreaves Lansdown website, it is protected, but according to FSCS website, it is not.

How safe is your investment? | Hargreaves Lansdown

Bank & savings protection checker | Check your money is protected | FSCS

Any help is greatly appreciated as the last thing I want at this age is to lose my life savings.

 

Martico

It's protected. See the "Client money is held on trust" section from your first link - that lists the FSCS-covered institutions that HL deposit your money with

El_Torro

Wow, that's a very good rate. The only easy access savings accounts and Cash ISAs that come close to it at the moment include a short term bonus. 

Remember that the interest rate can change at any time, which is true with any easy access savings account.

ColdIron

HL hasn't got a banking licence itself but then they are not holding your money. It will be held with whichever banking partner does hold your money and they will have FSCS protection, for instance that 4.55% ISA looks to be Shawbrook. Money in transit will be held by a bank, currently Barclays. HL or their creditors can't call on any of your money if they fail to meet their obligations like a traditional bank, it's ring-fenced

BTW That's a good rate for easy access let alone a fixed rate

BenTa

Thanks a lot for all of your replies and detail explaining of how HL works, really appreciated a lot.

As it seems, it is too much complicated for me, with all these financial terms, and I think am going to use another Cash ISA provider, “Leeds Building Society”, yes it gives less interest rate, 4.12%, but it is more pace of mind for me, knowing who am dealing with.

Thanks again for your help, wishing you all the best.

refluxer

BenTa said:

Thanks a lot for all of your replies and detail explaining of how HL works, really appreciated a lot.

As it seems, it is too much complicated for me, with all these financial terms, and I think am going to use another Cash ISA provider, “Leeds Building Society”, yes it gives less interest rate, 4.12%, but it is more pace of mind for me, knowing who am dealing with.

Thanks again for your help, wishing you all the best.

For what it's worth, Shawbrook are an established name these days - in this case, you're simply dealing with them via HL in order to get a much better rate than you would if you dealt with them directly (4.55% vs 3.30%).

As you can currently get around 4.50% in a (non-ISA) easy access account, it's probably worth asking - do you definitely need your money in an ISA ? £7,000 would generate £318.50 in interest PA at 4.55% and you can earn up to £1,000 in interest outside of an ISA without paying tax as a basic rate tax payer and £500 as a higher rate tax payer. Low earners can also earn a lot more than that (see here for details).

eskbanker

BenTa said:

...it is more pace of mind for me...

Quick thinking?

moneysaver184

I'm in the same predicament, this is the best rate I have found but having searched on the fscs website it says they are not covered. I'm looking at transferring 66k after  realising my current provider is only paying 1%

eskbanker

moneysaver184 said:

I'm in the same predicament, this is the best rate I have found but having searched on the fscs website it says they are not covered. I'm looking at transferring 66k after  realising my current provider is only paying 1%

Hopefully not a predicament anymore, after reading the explanation above?

Ch1ll1Phlakes

I'll add this link to the HL website on savings protection not investment protection (Find out how your savings are protected | HL) as the product discussed above is a Cash ISA not an stocks and shares ISA.

Their explanations are actually pretty clear, about and where your cash will be and how it will be protected.

badger09

moneysaver184 said:

I'm in the same predicament, this is the best rate I have found but having searched on the fscs website it says they are not covered. I'm looking at transferring 66k after  realising my current provider is only paying 1%

You can’t transfer £66k from existing Cash ISA to HL Cash ISA directly. Process is set out here;  

https://www.hl.co.uk/savings/cash-isa/cash-isa-transfers