Why FSCS still advertising on Radio money is protected ?

[TheRocket]

Ever since 2008 we have been told by Government that they will protect peoples savings in each bank acct up to 75,000 pounds but why to they still see the need to advertise the fact ?

Is it that :

a) People have taken their money from banks and are investing it elsewhere (or sticking it under the mattress !) and this is done to encourage them back ?

b) They are genuinely worried that a bank or several banks might go under and people have too much in one place and they can say 'we told you not to have it all in one place' ?

c) They are being nice and just looking out for peoples welfare ?

d) If the money is in a bank they can control everyone much more if they need to by limiting supply of cash ?

e) another reason... conspiracy theories please

It just seems a bit odd...

Edited by TheRocket on Friday 12th February 12:27

[iphonedyou]

Economic confidence generally, assisting in ensuring banks can meet their capital adequacy requirements, and ensuring people don't lose should a bank go under and they're holding over the protected threshold.

Probably.

[TheRocket]

Fair enough, I wonder how many people this really affects in the U.K. as a whole anyway ?

[anonymous-user]

Also that the max guaranteed limit for savings was reduced from £85,000 to £75,000 at the beginning of the year, so probably getting the message out to as many as possible.

Edited by djstevec on Friday 12th February 12:41

[Barkychoc]

Probably everybody - where do you think your pension fund investments are?
Much as I dislike the greedy robbing bankers the financial world is so entwined that it's like a row of dominoes.

[grahamr88]

djstevec said:

Also that the max guaranteed limit for savings was reduced from £85,000 to £75,000 at the beginning of the year, so probably getting the message out to as many as possible.

Edited by djstevec on Friday 12th February 12:41

This. They've reduced the limit, but they're hoping people don't realise that, and will instead think that this is a new and generous move.

[worsy]

grahamr88 said:

djstevec said:

Also that the max guaranteed limit for savings was reduced from £85,000 to £75,000 at the beginning of the year, so probably getting the message out to as many as possible.

Edited by djstevec on Friday 12th February 12:41

This. They've reduced the limit, but they're hoping people don't realise that, and will instead think that this is a new and generous move.

Technically it hasn't. It's 100000 euro and since the last review the pound has strengthened against the Euro.

[iphonedyou]

grahamr88 said:

This. They've reduced the limit, but they're hoping people don't realise that, and will instead think that this is a new and generous move.

I don't think so.

I'd imagine most people would realise the compensation is, after all, taxpayer funded. It's no more than a separate pot of tax funds reserved for a specific purpose.

[Justayellowbadge]

Most likely is a 'use it or lose it' approach to their communications budget.

[PurpleMoonlight]

iphonedyou said:

I don't think so.

I'd imagine most people would realise the compensation is, after all, taxpayer funded. It's no more than a separate pot of tax funds reserved for a specific purpose.

Not so, it's funded by the financial services industry.

[iphonedyou]

PurpleMoonlight said:

Not so, it's funded by the financial services industry.

Right you are! Many thanks for that - please excuse my ignorance!

[Mr GrimNasty]

As said above, it is to make sure everyone is aware of the recent changes to the scheme.

[anonymous-user]

iphonedyou said:

PurpleMoonlight said:

Not so, it's funded by the financial services industry.

Right you are! Many thanks for that - please excuse my ignorance!

In theory. In practice, in 2008 when Iceland rolled over, FSCS was woefully underfunded and had to borrow 20bn quid of your money at a most agreeable rate. I don't recall it ever being reported in the mainstream press at the time and it is rarely ever mentioned. http://www.mortgagestrategy.co.uk/government-wants...
As I understand it the FSCS essentially remains 'unfunded', until such a time it's needed... when the banks won't have the money to pay for it.

[CorbynForTheBin]

worsy said:

grahamr88 said:

djstevec said:

Also that the max guaranteed limit for savings was reduced from £85,000 to £75,000 at the beginning of the year, so probably getting the message out to as many as possible.

Edited by djstevec on Friday 12th February 12:41

This. They've reduced the limit, but they're hoping people don't realise that, and will instead think that this is a new and generous move.

Technically it hasn't. It's 100000 euro and since the last review the pound has strengthened against the Euro.

Yup. Annoying when people think 'they've decreased it' which is garbage.

Just fx movement.

[anonymous-user]

I wonder about this with my offset mortgage say i have £130k mortgage and £160k does it just 'balance out' and I get my £30k back

[Budflicker]

I doubt it, the banks have most angles covered.

I expect you would get 75k back and still owe them 130k on the mortgage as it is a separate account.

[CorbynForTheBin]

Budflicker said:

I doubt it, the banks have most angles covered.

I expect you would get 75k back and still owe them 130k on the mortgage as it is a separate account.

Yup

[Rostfritt]

Budflicker said:

I doubt it, the banks have most angles covered.

I expect you would get 75k back and still owe them 130k on the mortgage as it is a separate account.

An offset mortgage would not be a separate account though? In that case wouldn't you effectively just have 30k savings in an account with a 130k overdraft limit?

[grahamr88]

CorbynForTheBin said:

worsy said:

grahamr88 said:

djstevec said:

Also that the max guaranteed limit for savings was reduced from £85,000 to £75,000 at the beginning of the year, so probably getting the message out to as many as possible.

Edited by djstevec on Friday 12th February 12:41

This. They've reduced the limit, but they're hoping people don't realise that, and will instead think that this is a new and generous move.

Technically it hasn't. It's 100000 euro and since the last review the pound has strengthened against the Euro.

Yup. Annoying when people think 'they've decreased it' which is garbage.

Just fx movement.

Ah I stand corrected, I hadn't realised it was set in Euros.

[speedy_thrills]

speedyguy said:

I wonder about this with my offset mortgage say i have £130k mortgage and £160k does it just 'balance out' and I get my £30k back

What happens to tracker mortgages in the UK if the base rate goes negative by more than the rate of the offset and fees? We don't do trackers in New Zealand.

We still get the 'old dears' calling to ask if their money is safe in the bank and of the government guarantees it (which they've not done here for many years now ). The Reserve Bank of New Zealand have decided to call its alternative the "Open Bank Resolution Policy" because it sounds better than "The Cyprus Solution". Apparently in Australia you can buy a sort of term deposit insurance but I have no idea who would underwrite such a thing.