Icesave: how safe are your savings? Facts and myths

Optimist

All compensation for Icesave customers is being handled by the UK authority, The Financial Services Compensation Scheme.
This body should, over the next few weeks, contact all British customers and ask if they think they are entitled to compensation. They will soon have your details; you should not need to contact the organisation.
It is likely to enclose a relatively simple form that you will need to fill in. You will need proof of your customer account number and how much money was in your account when the bank collapsed.
For this, you will need to log onto Icesave's website – which is still operating, even though the bank has stopped all transactions – and print off your latest balance.
The good news is that the Treasury has stepped in to guarantee all savers' money – regardless of how much they had in their accounts. The Treasury has also promised to cover any shortfall that may arise from the Icelandic authorities being unable to fund their bit of the compensation scheme.
It is unclear, however, whether money held in Cash ISAs – tax-free accounts – will keep their tax-free status when the money is repaid. It is likely that they will be, as the Government made sure Northern Rock customers did not lose their tax breaks when they withdrew money from the bank.
Whether savings will carry on earning interest over the coming weeks, is far less clear. Do not get your hopes up.
The Financial Services Compensation Scheme can be contacted by calling 0845 7300131 or by visiting www.fscs.org.uk/consumer
http://www.telegraph.co.uk/finance/financetopics/financialcrisis/3160539/Icesave-collapse-What-customers-should-do-to-get-their-money-back.html

davidw53

The Icelandic authorities are effectively in default of their EEA membership, because they are treating domestic iceland customers differently from other european customers. ie. They are allowing the local branch banks to operate while at the same time closing access from overseas internet customers.

There is no fomal legal process for this (apart from some recent emergency legislation). It is a parochial 'beggar-thy-neighbour' approach. Is it any wonder that their best friends come from Russia, another country where the rule of law is perverted for political ends?

I suggest the propertionate way forward here is to seize all european assets
of the failed icelandic banks, and directly reimburse ALL thier oversears depositors (not forgetting the 100millions deposited by UK local authorites), before returning any remaining capital to the icelanders.

EconomicsGirl

Just saw on Channel 4 News that Wessex Children's hospice stands to lose almost £6 million from the downfall of the Icelandic banks. Hopefully the government will bail them out but if not as lots of us stood to lose £16k maybe we could think about making a donation each when we get the Icesave payout. If anyone wants to donate their website is:

http://www.naomihouse.org.uk/news/art181.aspx

If each of the 300,000 savers donated £20 each that would give them their £6 million back. I hope they get bailed out but it's a good cause anyway.

I saw on BBC2 today that we should get paid out interest to the day the bank went into default (even when its due later) but obviously not after - personally I'll be very happy just to get the capital back. They are saying now it should take weeks rather than months to process but I believe that when I see it. ISA allowances are safeguarded.

CFC

Doesn't make sense to me.

If a UK bank went totally broke customers are not guaranteed all their money back under FSA compensation scheme, but the government are guaranteeing every penny in ICESAVE?

Makes me wonder if its because their rich, rich, friends have a LOT of money in there.

CarolAnn_3

I was in the midst of transferring my ISA from Lloyds to Icesave. It left my Lloyds account last Thursday by Bacs transfer, but has not yet arrived in Icesave. I am now concerned re claiming back my money from the compensation scheme as my money appears nowhere. I have asked Lloyds for written confirmation that they have sent the money and when.

I just wondered if anyone else was having this problem.

I'd also like to thank the call centre in Newcastle are doing a marvellous job trying to re-assure those of us who phone and answer our queries when their jobs are seriously at risk. They have even rang back which is better than a lot of other call centres. I have managed to get through a couple of times with few issues despite others here saying they can't get through.

chris_yo

CFC wrote: »

Doesn't make sense to me.

If a UK bank went totally broke customers are not guaranteed all their money back under FSA compensation scheme, but the government are guaranteeing every penny in ICESAVE?

Makes me wonder if its because their rich, rich, friends have a LOT of money in there.

The government already guaranteed Northern Rock savings, and they paid out for Bradford and Bingley. It seems that Brown and Darling are trying their best to make sure that no saver loses money, despite the compensation scheme only covering £50k. Whether that is possible or not will depend on how many more banks go under - at some point it will become unaffordable. On the other hand, if any savers do lose money it'll lead to a collapse in consumer confidence, which would probably be far worse for Britain in the long term than a bailout.

luv_my_brass

5) They go bust refuse to pay - british Govt threatens to freeze all icelandic based UK assets - maybe starts another Cod War!



I would put No. five as my No. 1 probability :-(

Dan_66

Just published on the FSCS website.......sounds dodgy to me....here we go again! I wouldn't trust the robbing Icelandic Prime Minister with 50p let alone £50000!!



As you know, Icesave (the UK branch of the Icelandic bank Landsbanki) was declared in default by the Financial Services Authority on Wednesday and the Chancellor of the Exchequer announced on the same day that he had put in place arrangements to ensure that no retail depositor would lose any money as a result of the closure of Icesave.
Since Wednesday, FSCS and the other UK authorities involved have been working together and with the Icelandic authorities to establish the best process for getting you your compensation entitlement, having regard to the Icelandic Fund's responsibilities, our own obligations and the Chancellor's announcement. Discussions will be continuing over the coming days on the most efficient way forward.
Many callers to our helplines have enquired whether they will need to make separate applications - to Iceland, to ourselves and to the Government. We remain hopeful that we will be able to reach agreement on arrangements which will mean that you only have to deal directly with one of the three organisations, the FSCS.
We will post a further update on our website as soon as we can, and expect to be able to give you firm news by the end of next week. But there is no need to take any action at this time.
Our focus is on making sure that those entitled to our protection get our help as quickly and efficiently as possible. We are committed to finding the best way of delivering FSCS protection to you and relieving you of the worry we know you are experiencing. Meanwhile, HM Treasury has given reassurance that savers' money is safe and secure.

Optimist

Dan_66 wrote: »

Just published on the FSCS website.......sounds dodgy to me....here we go again! I wouldn't trust the robbing Icelandic Prime Minister with 50p let alone £50000!!



As you know, Icesave (the UK branch of the Icelandic bank Landsbanki) was declared in default by the Financial Services Authority on Wednesday and the Chancellor of the Exchequer announced on the same day that he had put in place arrangements to ensure that no retail depositor would lose any money as a result of the closure of Icesave.
Since Wednesday, FSCS and the other UK authorities involved have been working together and with the Icelandic authorities to establish the best process for getting you your compensation entitlement, having regard to the Icelandic Fund's responsibilities, our own obligations and the Chancellor's announcement. Discussions will be continuing over the coming days on the most efficient way forward.
Many callers to our helplines have enquired whether they will need to make separate applications - to Iceland, to ourselves and to the Government. We remain hopeful that we will be able to reach agreement on arrangements which will mean that you only have to deal directly with one of the three organisations, the FSCS.
We will post a further update on our website as soon as we can, and expect to be able to give you firm news by the end of next week. But there is no need to take any action at this time.
Our focus is on making sure that those entitled to our protection get our help as quickly and efficiently as possible. We are committed to finding the best way of delivering FSCS protection to you and relieving you of the worry we know you are experiencing. Meanwhile, HM Treasury has given reassurance that savers' money is safe and secure.

That seems to be the relevant bit

chris_yo

Optimist wrote: »

You will need proof of your customer account number and how much money was in your account when the bank collapsed.
For this, you will need to log onto Icesave's website – which is still operating, even though the bank has stopped all transactions – and print off your latest balance.

This can't possibly be true - it would be trivial to alter the balance amount and print out a statement...