Posted on March 25, 2010.
How safe is your money? - Your Guide to Protection My God what a roller coaster, it has been recently!
It seems that not a day goes by without more gloom. A bank goes bust or is rescued, an insurance company has been swallowed up by another or is nationalized.
It is in these moments that people quite naturally be very concerned and want to ensure they are protected.
Let's look at cash deposit savings.
What are the rules and what protection do you have?
Where should you invest your money?
Are offset deposit accounts in mortgages affected and what about life insurance companies and other investments?
What are the rules on deposit accounts?
This area is covered by the Financial Services Compensation Scheme (FSCS).
The basic coverage for deposits is 100% of first £ 50,000 (£ 35,000 was before October 7, 2008). This ceiling is per investor, who holds a banking license. Thus, a single deposit with a common bank is covered for a maximum of £ 100,000 #
However, some banking groups operate several different brands, but have only one banking license. The best example of this is HBOS, as they own Saga, AA, Birmingham Midshires, Intelligent Finance, Halifax and Bank of Scotland.
Thus, any investor should limit their total deposits in these six institutions £ 50,000.
Of course, this is further complicated by the proposed merger between Lloyds and HBOS, and it is not yet how it will affect things.
Deposits in non-UK banks operating in the United Kingdom are generally covered up to £ 50,000, but not necessarily throughout the FSC. Economic Area (EEA) banks can adopt a "passport" that approach, which means that the compensation scheme applies the home country first with the FSCS providing a backup if necessary.
However, two exceptions apply here.
They could choose to operate on the "passport" that basis alone, leaving only the depositors of the bank clearing the country of origin. The big names of foreign players do not because of the bad publicity it would bring.
In addition, the Irish Government increased its compensation scheme limit to 100,000 a‚¬ (approx. £ 79,500), September 20, 2008. Thus, banks such as Anglo-Irish and Bank of Ireland UK investors provide protection much more than the FSC. This affects the Post, that the accounts are managed by the Bank of Ireland.
A 100% protection with no ceiling is available through national savings and investment and, yet, by Northern Rock.
Offset Mortgages
Many of our customers rightly use reduce soft loans that can save them a lot of money over the years. However, the rules that apply here?
There are two possibilities:
A rule called "compensation" could come into play with the banks. This article states that insolvency law that your position is calculated - savings would be deducted from your debt.
But this law does not apply to building societies. The Building Societies Association have confirmed that the compensation rule does not apply automatically, although each company may have written in their terms and conditions. Even then, it will depend on administrators.
Life Insurance
For companies in the United Kingdom allowed life, it works like this - the FSCS covers 100% of first £ 2,000 of value and 90% after, without limit.
Life insurance companies offshore
They rely on their home company scheme - if it exists. The Isle of Man scheme is similar to that of the United Kingdom, while Guernsey has no scheme, but insists on 90% of the assets of a company's life being held by an independent custodian.
Bonds Investment in the United Kingdom invested in cash deposits
Neither the company nor the investor's life ie
