Are your savings safe? article discussion

alrusan

I was searching to find what do the National Savings and Investments (NS&I) invest there money in? is it a bank or saving society? I tried to contact them directly and received no response .

Anyone knows anything about that?

altocumulus

alrusan wrote: »

I was searching to find what do the National Savings and Investments (NS&I) invest there money in? is it a bank or saving society? I tried to contact them directly and received no response .

Anyone knows anything about that?

National Savings and Investments is a provider which offers a range of savings accounts and bonds that raise money for the government and pay the investor interest in return.
Some offer tax-free interest, others are taxable.
Previously known as the Post Office Savings Bank, the scheme was set up in 1861 as a way to encourage workers to save. Today, backed by the Treasury, it is the UK's second largest savings institution, with more than 30 million customers.
The benefit of being a National Savings' investor is that by loaning your capital to the government you receive security for your investment in return.
Interest rates may be fixed, variable or index-linked to the rate of inflation, depending on which type of account you choose.

alrusan

Many Thanks.

Now I would like to know how they make profit? how do they pay interest to investors? What kind of business/projsects are they running? Is it a bank and they make money by giving loans and mortgages?

Broadsword1947

Don`t think you quite followed the answer you got. National Savings and Investments is part of the Government. It collects money from you and pays you interest at a lower rate than if it had to borrow money from other sources. Chances are you will invest money you have already paid tax on, so the Treasury has already had a slice of your money. It "invests" the money in Government Spending which means it doesn`t have to take as much tax from everyone else and keeps down the public sector borrowing requirement.

gomann

FYI ...
http://www.thisisjersey.com/2008/10/04/states-to-guarantee-savings/

What that will mean in reality I don't know: there are a limited number of offshore institutions operating from Jersey [RBS, HSBC, BOS(I), Abbey Int]. The majority are IoM, where the £15k cover still applies.

Hope that might help someone.

silvercar

Offset mortgage savings

Interesting article in Sunday Times today, suggesting that offsets from building societies only may not be safe above the limit.

http://www.timesonline.co.uk/tol/money/savings/article4881428.ece

calypso_rhapsody

It seems to me likely that we will see an increasing number of bank/BS mergers - indeed some commentators are predicting a very significant reduction in the number of UK banks. This being the case, i am thinking on how much it is safe to put in any one institution on a fixed long term basis. I have already been caught out by the Abbey/B&B transaction - with close to £35k in each i now find that i am not fully protected as i was and can't do much about it until one product matures. And if Abbey changes its mind and decides to bring A&L into the group registration the position will get even worse..... Assuming the £50k cap is implemented on Tuesday as promised, would it be wise in fact to limit future deposits with any one institution to say £25k to allow for at least one 'merger' in the deposit period?

dunstonh

ndeed some commentators are predicting a very significant reduction in the number of UK banks

That has already happened. We are probably there or thereabouts now in the UK. Europe and US have some more to go but the UK already consolidated a lot back in the 50s-70s when the country was going through worse times.

I have already been caught out by the Abbey/B&B transaction

Why have you been caught out?

with close to £35k in each i now find that i am not fully protected

Why not?

would it be wise in fact to limit future deposits with any one institution to say £25k to allow for at least one 'merger' in the deposit period?

If you are that paranoid then I suggest you dont leave the house because you are worrying about events which are now more remote than you being struck by lightening. Better not drive as you may have an accident. Better not get on a bus as the bus driver may have an accident. Better not walk as you may get hit by a bike.

stevedb11

Well said dunstonh, be nice to hear the ops answers.;)

calypso_rhapsody

I understand your reactions but as someone who has tried to follow the advice to limit savings in any one institution to the FSCS limit (£35k, soon to be £50k) i find it rather disturbing that my efforts are being undermined!

Are you saying that you would place a limitless amount in any institution? Certainly not Martin's advice!

I'm not outrageously risk averse - indeed my hobby (horse-riding) is said to be the most dangerous there is! But i feel that it there is protection there when i open a fixed term savings account then it should be there for the life of the product.