Are your savings safe? article discussion

StevieJ

Some minister or other talking to Andrew Neil last night on TV said that the current provisions covered something like 96% of savers deposits, I thought this unlikely as if it was true there would be little problem moving to a 100% guarantee.
I was only listening in the background and may have got that wrong, anyone else see it?

altocumulus

nicko33 wrote: »

what's your point?
Their inflation is 14% now
http://www.sedlabanki.is/?pageid=194

My point was - the post gave OLD news ... a lot has happened since....

k2468

We are all worrying about our savings being covered, but on BBC Moneybox a week or two ago they implied that if you have a mortgage with the same bank as your savings then your savings could be offset against your mortgage if the bank goes under. Did I misunderstand that or is this the case?

altocumulus

k2468 wrote: »

We are all worrying about our savings being covered, but on BBC Moneybox a week or two ago they implied that if you have a mortgage with the same bank as your savings then your savings could be offset against your mortgage if the bank goes under. Did I misunderstand that or is this the case?

You are correct. The bank or liquidator takes all your money - 100% of your outstanding loan(s). What is left is yours, but only guaranteed upto the £35k (as at present). Seems very a very unfair and one-sided arrangement;
therefore the ideal solution is to save with one institution and keep your loans/mortgage with another....

GeorgeHowell

StevieJ wrote: »

Some minister or other talking to Andrew Neil last night on TV said that the current provisions covered something like 96% of savers deposits, I thought this unlikely as if it was true there would be little problem moving to a 100% guarantee.
I was only listening in the background and may have got that wrong, anyone else see it?

I'm not sure how they would know. Nobody has to declare their total liquid assets to HMG or statisticians. I suspect that this is based just on the size of investments by the same saver/investor with one institution, maybe even just one account in some cases. Because a lot of people probably have taken heed of the £35,000 limit, it is very credible that only 4% of savers are now exceeding that limit. However I suspect that the number of people with more than £35,000 to save/invest is more than 4% of the total. An increase of the FSCS guarantee to £50,000 will make it easier for them to take advantage of the best interest rates available. A 100% gurantee by HMG however could be opening a Pandora's box because a significant number of people might then start putting hundreds of thousands into individual bonds or whatever that pay the highest rates, and the impact on FSCS -- and probably the taxpayer -- if one or more institutions failed could be massive.

Also a 100% guarantee apparently may contravene EU competition laws, and we can't have that now, can we.

isofa

Found this at the FT, makes an interesting point, Are European banks too big to fail?

isofa

k2468 wrote: »

We are all worrying about our savings being covered, but on BBC Moneybox a week or two ago they implied that if you have a mortgage with the same bank as your savings then your savings could be offset against your mortgage if the bank goes under. Did I misunderstand that or is this the case?

A simple search is your friend:

http://forums.moneysavingexpert.com/showthread.html?t=1036075

http://forums.moneysavingexpert.com/showthread.html?t=863025

And for clarification: http://www.fscs.org.uk/consumer/FAQs/Deposit_claims_FAQs/

hampshire_steve

in the relared article there was mention that a small business a/c (upto £1m turnover) was also protected to 35k. did i read that correctly? is there a different scheme or same scheme as man in the street scheme?

hampshire_steve

ok so after lazily asking the forum i have now found my own answer - posting it as it may benefit others. yes SMALL businesses covered if can qualify for 2 of the following:
< 50 employees
< £6.5 mill turnover
< £3.26 mill in assets

cheers.

ian-d

At a time when surely the government could do with an influx of money, why have Northern Rock closed their savings account to new members? I cannot understand the logic?