Are your savings safe? article discussion

JoanWitness

As an old age pensioner I tend to save in one year fix rate Bonds which cannot be cancelled until the one year period is finished.
This gives me a monthly income.
I invested £35000 in the Nationwide which is Britains No 1 Building Society on the 1st Of September.

I then looked for another safe Building Society which was the Derbyshire at Number 9 in the ratings for Biggest Building Society on September 1st and invested £20000.

They are now going to merge so I stand to lose £20000.

What sort of Government would allow this for an old age pensioner.

No one is safe if this rule does not allow for mergers and who knows what other building societies may merge.

dunstonh

I invested £35000 in the Nationwide which is Britains No 1 Building Society on the 1st Of September.

Nationwide is a mutual. You cannot buy shares in Nationwide. I assume you mean you bought an investment product with the Nationwide. In which case, the protection is not £35,000 as investments have their own limits.

They are now going to merge so I stand to lose £20000.

Why do you stand to lose £20,000?

What sort of Government would allow this for an old age pensioner.

What is it that you think the Govt have done?

No one is safe if this rule does not allow for mergers and who knows what other building societies may merge.

No-one is safe crossing the road but we still do it. I think you need to consider that there hasnt been a failure of a UK retail bank in over 100 years. The NR doesnt count as the Govt stepped in as they would now have to for any others that went that way. However, the likes of Nationwide are well capitlised which is why they are buying and not being bought (or demutualising which would be Nationwide's next option if they needed money).

You also need to clarify if it is savings or investments as they have different limits and are independent of each other. i.e. you could have £48,000 on investments and £35,000 of savings but te 48k has no impact on that £35k limit.

JoanWitness

These are 1 Year Fix Rate Bonds which are my life savings.

They are not investments but cash savings.

I stand to lose £20,000 because if they merge I am only covered for £35,000 not £55,000.

dunstonh

I stand to lose £20,000 because if they merge I am only covered for £35,000 not £55,000.

You wont lose money. You just lose some FSCS protection.

There are far more likely things going to happen before the Nationwide go under. A bank failure is not likely now (failing brands are more likely to be bought by the stronger banks now as they can pick them up quite cheap and the Govt is not likely to block it on competition grounds). Even if one does fail the Govt has set a precedent and it would have to step in to maintain stability in financial services.

The FSCS protection is almost meaningless as its so unlikely to be called upon for a retail bank at this time.

JoanWitness

Thanks DunstonH.

chris1

dunstonh wrote: »

A bank failure is not likely now... Even if one does fail the Govt has set a precedent and it would have to step in to maintain stability in financial services.

The FSCS protection is almost meaningless as its so unlikely to be called upon for a retail bank at this time.

A brave statement! Presumably you are referring to UK-only banks and building societies?

Rosalind

As most people are, I am worried about my savings. I have recently inherited roughly 3 times the currently protected sum. I know I should be spreading it between 3 institutions, but I live in France, and am having difficulty opening accounts. My current and savings accounts are with Lloyds, and the former was opened when I still lived in the UK. It would seem that I need proof of UK residence in order to open another account elsewhere. Or does anyone know of a good bank that will take my money without proof of a UK address?
Thanks for your advice.

baby_boomer

polyphonic99 wrote: »

As usual the "quality press" and most of the media ignore pertinent issues. Maybe their financial journalists aren't very bright.

The merger of the Nationwide, Derbyshire and Cheshire Building societies means the loss of 3 lots of security under the FSCS (Financial Services Compensation Scheme), from a total of £105,000 down to one lot of £35,000.

To be fair, this issue was eventually raised in both the Sunday Times and the Financial Mail on Sunday.

Optimist

Rosalind wrote: »

As most people are, I am worried about my savings. I have recently inherited roughly 3 times the currently protected sum. I know I should be spreading it between 3 institutions, but I live in France, and am having difficulty opening accounts. My current and savings accounts are with Lloyds, and the former was opened when I still lived in the UK. It would seem that I need proof of UK residence in order to open another account elsewhere. Or does anyone know of a good bank that will take my money without proof of a UK address?
Thanks for your advice.

The wonderful (haha) money laundering regulations require all banks to ask for satisfactory proof of your name and address so in answer to your question No !

Can you not open a French account They do have a guarantee scheme over there I believe it to be in the region of 70000 Euros but you would have to confirm that

altocumulus

XL Holidays is linked into Landsbanki, how safe does this make Icesave - I wonder?

Sourse of info is an article on West Ham FC... http://news.bbc.co.uk/1/hi/business/7613351.stm