Savers with cash frozen in accounts with the UK branch of Icesave will get back their savings through a fast-track refund scheme. Payments are expected to begin in the first two weeks of November. Although the plan has yet to be finalised, it is expected that payments will be made electronically into other accounts. This will happen in stages and the Financial Services Compensation Scheme (FSCS) will write to all ‘retail depositors’ to explain how the process will work.
Archive for the ‘Savings’ Category
Icesave savers to get fast-track refunds
Saturday, October 25th, 2008Britons fear saving with foreign banks
Friday, October 24th, 2008British savers have rushed to withdraw money from foreign banks and many more are planning to steer clear of them in the wake of the Icelandic banking crash. British banking brands are expected to attract tens of millions in savers’ cash as a result. The irony however is that the top ‘British’ brand on interest rates, Bradford & Bingley, is not technically British following its recent acquisition by Spanish bank Santander.
It must be said however that Indian own ICICI and Nigerian own FBN are fully covered up to £50,000 by the Financial Services Compensation Scheme and do not operate under a foreign passport compensation system like Dutch bank ING Direct or the Turkish Akbank (or even the UK branch of the fallen Icelandic banks).
Icelandic compensation to start soon
Thursday, October 9th, 2008Thousands of UK customers of two of the collapsed Icelandic banks will receive application forms for compensation for their lost savings in the next week. Most customers of Kaupthing and Heritable Bank will have compensation automatically transferred to ING Direct (its new owner). ING Direct is acquiring £2.5bn of deposits and 160,000 customers from Kaupthing and £538m of savings held by 22,200 people with Heritable Bank.
Icesave customers should learn on Friday how to claim their compensation. The UK Treasury said the three banks were in default but savers’ money was safe.
Will the UK pay full Icesave compensation?
Wednesday, October 8th, 2008
So far, Iceland has claimed that it has the funds to compensate the UK’s 300,000 savers who have deposits with its Icesave accounts, so all customers will have to sit tight for the time being. Compensation must be provided within three months under EU rules.
However, if this turns out to be incorrect, the Financial Services Compensation Scheme (FSCS) has said that it will not pay back the full £50,000 if the Icelandic system finds it is unable to pay back any individual’s funds owed up to its guarantee of 20,000 EUR (£16,000). So if you have £50,000 saved with Icesave and the Icelandic system cannot meet its obligation of £16,000 owed, then the UK system will only provide the ‘topped-up’ additional sum of £34,000.
300,000 Icesave accounts on lock-down
Tuesday, October 7th, 2008Icesave savers are still unable to withdraw their cash after the internet bank’s parent company was put into receivership by the Icelandic government. About 300,000 UK savers have spent a day unable to access their cash and face a nervous overnight wait to see if they must go to compensation schemes for their savings to be returned. Although a Landsbanki spokesperson said: ‘The bank is still operational and is in receivership. It has not gone bankrupt and so no ‘compensation’
arrangements are triggered.’
Meanwhile, the Icelandic government has guaranteed all its citizens’ savings 100%, but the guarantee does not extend to UK savers and people logging on to Icesave’s website were greeted with a message telling them that the group was not currently processing any deposits or any withdrawal requests on its internet accounts.
The Post Office: Britain’s safe haven
Monday, October 6th, 2008
The Post Office is now the safest bank in Britain. The Post Office, which distributes National Savings & Investments (NS&I) deals and Post Office-branded accounts operated by the Bank of Ireland, last week became the outlet for the safest savings available anywhere. This is because NS&I is 100% guaranteed by the Government and all savings with major Irish banks, including Bank of Ireland, are guaranteed by Dublin until September 2010. But what a shame about the queues - in London, where more than 150 branches have shut recently, customers have to wait as long as half an hour.
Post Office offers new ISA
Wednesday, September 3rd, 2008
The Post Office has launched a cash Isa paying a market-leading 6.25% tax-free on a minimum investment of just £1. But the rate is boosted by a 1.5% bonus for the first 12 months. The account guarantees to pay at least Bank of England base rate (currently 5%) minus 1% until January 1, 2010.
It can be opened by branch or post, and application forms can be requested by phone. Transfers in from other providers are accepted. Withdrawals can be made only by post. Those tempted by this account, which, like all Post Office accounts, is run by Bank of Ireland, should be prepared to move once the bonus ends.
New inflation beating cash ISA
Saturday, August 16th, 2008
A cash-Isa has been launched by Leeds Building Society this month called the Inflation Buster ISA which promises to beat inflation over the next two years as measured by the Retail Price Index (RPI) and offer an extra 2.25% on your tax-free savings. After the Bank of England’s gloomy assessment for the economy, forecasting inflation may hit 6% before the end of the year, this is one for serious consideration. Although it is technically a two-year fixed-term product, you can access your money after each of the annual interest payment dates without any loss of interest. So it is effectively two one-year products that run consecutively too.
The minimum deposit is £1,000 and it must also be remembered that the two-year term runs from 1 October 2008 to 30 September 2010, so if you invested now you will only receive a rate equivalent to base rate (currently 5%) until October. However this is likely to be a popular product so it may be best to get in there early.
£50k savings protection proposed
Monday, July 7th, 2008Chancellor Alistair Darling aims to raise the amount of money protected from the current £35,000 to a new ceiling of £50,000. Savers who lose money when a bank goes under will be given compensation within a week, instead of months. However, banks said making them pay up-front would divert vital capital away at a time when they were already under pressure from the credit crunch. So instead, the new scheme will borrow money from the public sector, if necessary, to enable quick payments. The Chancellor believes more generous protection will cut the risk of panic if a bank is rumoured to be in trouble.
How to avoid the negative equity trap
Wednesday, April 23rd, 2008Here are a list of what you can do:
- If your mortgage is interest-only, switch to repayment asap. It will be more expensive in the short term but will save you thousands in interest in the long run.
- Pay extra on your mortgage every month. This will reduce the debt and cut the interest that you are charged each month. But check how much you are allowed to repay penalty free.
- If you want to repay more than the bank will allow penalty free then put the extra cash into a cash Isa first for tax free savings. This can then be used to bolster your equity when you want to move home or remortgage.
- Don’t be tempted to borrow from other sources such as credit cards to repay your mortgage.
For more information, visit thisismoney.com
