Are your savings safe? article discussion

arty4

and note that icici have raised their 1 year term interest to a whopping 7.0% from 22 april - somewhere to put another tranche of your money with them once you have broken it down into more than one account? and if you do take some your money out of your present a/c with them, and it's a joint a/c, remember to convert it to an a/c in just one of your names.

jeanssis

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arty4

jeanssis, no - the £35k safegurad applies to all the holdings in one bank by one named individual. to have £70k safely with icici you'd have to have £35k in your name and the othert £35k in your husband's name. of course you have to take into account your personal tax positions as part of your overall consideration of what to do.

just in case you haven't picked this up yet - when i say 'one bank', that means one with one overall ownership - eg 'first direct' is owned by HSBC, so you couldn't for instance have £35k in each of those 2 - because for these purposes they are one and the same bank.

jeanssis

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TheBigQuestion_2

I thought this questions had been sorted, and the agreement was (and I got this confirmed by a different person at the FSCS) that if a person has a 100K mortgage and 105K in savings, then after the bank failure the mortgage would be paid off (assuming it was under the same banking licence) and the FSCS claim would be for 5K? There was even reference to an fsa document ( I think by JamesD ) which confirmed this.

I have just looked at the main article, which now stated something different
If you’ve more than £35,000

“This gets more complicated for larger amounts. The maximum compensation level on your savings remains at £35,000, meaning any savings above that amount would be lost.
For someone with an offset mortgage owing £150,000 but with £80,000 in savings, if the bank went bust the first £35,000 of savings are protected, so it would immediately be subtracted from your outstanding debt, but you would lose the remaining £45,000. Meaning it's possible, and there are various interpretations, you would still owe £115,000, the debt would probably be passed on, but you'd have no savings.
This does mean that if safety were the only consideration (rather than rate as well), it would be sensible not to offset more than £35,000 in a mortgage"

What’s happening is this discussion not completed???

jamesd

There is uncertainty.

FSCS says it'll use the difference. In common law banks but not building societies have a right of offset that allows them to use the difference when they are going bankrupt. Building societies don't. But might do it in contracts.

So, lack of clarity for savers. The article is currently, prudently, using the worst posible outcome.

TheBigQuestion_2

Thanks jamesd,
So am I correct in saying that
If my Savings & mortgage are with Barclays
or
If my savings are with lloydsTSB and my mortgage is with C&G
Then I am safe.
However if my mortgage and savings are with Nationwide and there is not a "Right to Offset" clause in my contract that I may be at risk ?
Thanks

jamesd

Correct if Nationwide is still a building society and hasn't done like some others and become a bank in all but name.

bonecold1

Does anyone know if the £35,000 limit applies to companies as well?

Meltdown_2

I am assuming you mean companies as depositors with banks & BS.

Well you could look at :
http://fsahandbook.info/FSA/html/handbook/COMP/4/2
but there has to be something more readable than that!

Certain "small" companies qualify for deposits compensation, but I can't recall offhand what the turnover figure is. Perhaps others could advise ...

Edit:
see post 105 in this thread :
http://forums.moneysavingexpert.com/showpost.html?p=9704317&postcount=105
and an earlier one in the thread by MSE Dan
http://forums.moneysavingexpert.com/showpost.html?p=9472389&postcount=31