Are your savings safe? article discussion

Reaper

David160 wrote: »

What happens if you have, for example, a mortgage of £100,000 and a savings account of £120,000, with the same institution?

The rules changes on 1st Jan 2011. Prior to that they would cancel each other out, but now you would get £85,000 back on the savings and be left with your mortgage still to pay. I]Edit but see Innovate's quote above[/I

What if the 2 accounts have some formal link, for example, offset mortgage accounts?

If the offset uses separate but LINKED accounts the same applies, but if they are a SINGLE account such that you have a large overdraft showing then the old rules apply and the savings will be deducted from the mortgage outstanding.

This question is not answered in the main article, can it be updated to include the answer?

I'm afraid I can't update the article and MSE staff rarely look at forum posts as there are just too many. You could try posting on the Site Suggestions forum.

EDIT: Innovate beat me to the answer, and it also clarifies how Insolvency Law applies when the mortgage is greater than the savings

merlingrey

There's no such thing as "safe" in finance just "safer"

Example: smoking is safer than shooting yourself in the head.

falcieri

I realise this has probably been asked but there are so many pages here now! What if we have a major crash and the Government is unable to bail us out? Do we just lose everything. I was watching a video from Money Week today and there is every chance that if things got really bad everything would just be absorbed into Government debt. Is there any way to make savings truly safe apart from putting it into a box under the bed?

Please feel free to redirect me if this has already been dealt with, but I have asked the question and the only answer seems to be - oh well the FSA will get you out if you're under £85000.

lisyloo

What if we have a major crash and the Government is unable to bail us out?

Well worse case scenario there would be civil unrest and looting, so you'd need to protect your property and land let alone your money. It's pretty unlikely though and most normal people have more likely things to worry about.
Money Week are interested in selling magazines and are notoriously sensationalist.

Putting money under the bed means it deflates, could get physically damaged or stolen. You home insurance will have limited cover for cash.

The UK situation is improving, bank are being recapitalised.

So the general view is that you'd be far better having it in the bank.
If there was looting then it wouldn't be safe under the mattress, but it's a bit like worrying about being struck by lightening.

My advice is don't read MoneyWeek.

I-LOV-MONEY

falcieri wrote: »

. Is there any way to make savings truly safe apart from putting it into a box under the bed?

I am willing to take the gamble that the Government / FSA won't have to bail you out.

Therefore, I am willing to offer you a deal. Send me all your money, and let me 'look after' it for you. Let me know when you want repayment, and I will repay all your money (if it is over £10k there maybe a three day delay).

I realise if I am wrong, I am going to have to find the money from somewhere else - I will see you outside Holborn tube station. I will be sitting there with a cap and a dog!!

Archi_Bald

The FSA won't bail out anybody because it no longer exists.

It also never had the the remit to bail out savers, and neither has the government, or the two FSA successor organisations, the FCA and the PRA.

The protection of savings, up to £85K per person per financial institution, is provided by the FSCS, which is an industry body.

I agree with lisyloo - stop reading MoneyWeek. Or only read it if you want to have a good laugh now and then.

murphydavid

Yahoo seem to have introduced a new possible danger to your savings. They are recycling email account names. So if you have a Yahoo email address you have given to your bank as your user name and you move on to a new email account but forget to tell the bank. It is possible that Yahoo will give your old email address to someone else without telling you and the bank will email them instead of you. They then go the banks log in and say they forgot their password. The bank sends them a password reset. and hey they are into your account. Or something like that.

John_Pierpoint

In view of the chaos at the Co-oP Bank, is it time to reconsider this thread.

innovate

John_Pierpoint wrote: »

In view of the chaos at the Co-oP Bank, is it time to reconsider this thread.

Why? Nothing has changed about the need to keep your savings below £85K per person per financial institution.

John_Pierpoint

So you are confident that you will get everything back within let us say 6 months?

When I get a bouncing Co-oP cheque , will you cash it for me for say 95% if its face value.