How safe are my savings?

[V1nce Fox]

£20k+ in a normal current account with one of the big high street banks. I've been watching a few videos lately and notice rumblings from one or two about negative interest, charges etc and the potential for the bank to stop removal of savings if a rush starts. i know they underwrite up to a certain amount but have also heard this has been done before (great depression) and when everyone went to pull funds, the banks shut their doors.


Can a grownup please offer any predictions or thoughts on this please? i'm awful with finance which is why i try to keep things simple.

[bitchstewie]

Don't conflate safe with accessible.

If you want to be sure they're safe (barring the collapse of Government) consider NS&I.

I'm no finance genius but I'd say there's a world of difference between your savings being safe and accessible when needed v what would happen if everyone in the country descended on their bank today asking for "cash".

Pretty sure no bank could survive that even in normal times.

[V1nce Fox]

bhstewie said:

Don't conflate safe with accessible.

If you want to be sure they're safe (barring the collapse of Government) consider NS&I.

I'm no finance genius but I'd say there's a world of difference between your savings being safe and accessible when needed v what would happen if everyone in the country descended on their bank today asking for "cash".

Pretty sure no bank could survive that even in normal times.

thanks for the reply. this isn't an area i know a whole lot about, i'm hearing people talk about converting balance into assets (gold,silver) and holding them personally. anyone here done it and if so is there a transactional cost that wipes out some of the balance? how would i sell it again when needed?

[dingg]

V1nce Fox said:

thanks for the reply. this isn't an area i know a whole lot about, i'm hearing people talk about converting balance into assets (gold,silver) and holding them personally. anyone here done it and if so is there a transactional cost that wipes out some of the balance? how would i sell it again when needed?

Do not hold physical gold or silver, its for nutcases and ww3 peppers.

[bitchstewie]

V1nce Fox said:

thanks for the reply. this isn't an area i know a whole lot about, i'm hearing people talk about converting balance into assets (gold,silver) and holding them personally. anyone here done it and if so is there a transactional cost that wipes out some of the balance? how would i sell it again when needed?

My personal view is that doing that sort of thing gets a bit wibble.

Don't get me wrong here if you simply like the idea of having a few gold coins or a small gold bar or something that's one thing.

Just go to Bullion by Post or any one of a number of places and buy some it's literally that simple.

But don't be surprised if your local co-op looks at you a bit funny if you try to trade them for tins of beans

If you're concerned spread your savings accounts around wider than a single bank.

[CubanPete]

I have a friend who holds physical gold.

He isn't a nutter, it is very compact to store and he has done very well out of it...

[Simpo Two]

On safety: https://www.fscs.org.uk/what-we-cover/

On accessibility, well, if a bank made it impossible to withdraw money then everybody's direct debits, mortgage payments etc would fail and things would really get interesting.

[anonymous-user]

Safe. No problem

[egor110]

Simpo Two said:

On safety: https://www.fscs.org.uk/what-we-cover/

On accessibility, well, if a bank made it impossible to withdraw money then everybody's direct debits, mortgage payments etc would fail and things would really get interesting.

Why ?

Direct debits , mortgage payments are just the banks shuffling money around .

If there's a run on the banks then they no longer have control over that money .

[Sheepshanks]

I'm quite near retirement and, for one reason or another, have quite a bit of cash.

I'm wondering whether I could settle my kids' (x2) mortgages and have them (both in, hopefully, safe public sector jobs) pay us an allowance. Not sure I trust their husbands though.

[NNH]

Sheepshanks said:

I'm quite near retirement and, for one reason or another, have quite a bit of cash.

I'm wondering whether I could settle my kids' (x2) mortgages and have them (both in, hopefully, safe public sector jobs) pay us an allowance. Not sure I trust their husbands though.

If you do this, consider structuring is as buying a percentage of their homes and renting that back to them, which makes the paperwork clear and gives you legal rights to the income.

[Mr Whippy]

If there is a run on a specific bank, then it’s likely it’s in trouble in isolation.
They’d shutter, things would be resolved quickly (contagion risk otherwise!) and then it’d open and things would have been resolved sufficiently for it not to be an issue.

Or it’d fail and FSCS cover you.


In the event of a catastrophic systemic failure then chances are government would backstop all savings to FSCS limits, and likely block cash withdrawals... after all if you have savings, you can only re-save them elsewhere or buy something, in which case your credit becomes someone else’s and they either save it, or spend it... and gov take tax... so back-stopping savings isn’t a bad thing or probably prohibitive as long as cash/assets aren’t going out of the UK.



If the SHTF and UK gov fails to back-stop it, then it’s a new paradigm.

Savings in anything from gold to bitcoin to cash will potentially be worthless.

In such a failure, a neo-socialist government may form and all your diversified property and cars and gold and farmland may just be taken by the state.



So basically, it’s fine. If it’s not, chances are you can’t protect from it.

If you fancy trying then diversify your savings.

NS&I bonds, savings. Banks. Building societies. Security box with PMs and cash.
PM at home and cash.
Bitcoins?
A fancy painting?
A garaged Sunday car with low miles?

[Simpo Two]

egor110 said:

Why ?

Direct debits , mortgage payments are just the banks shuffling money around .

If there's a run on the banks then they no longer have control over that money .

But not all your DDs are to banks.

[LeadFarmer]

Sheepshanks said:

I'm wondering whether I could settle my kids' (x2) mortgages and have them (both in, hopefully, safe public sector jobs) pay us an allowance. Not sure I trust their husbands though.

Nice idea, and could make their payments interest free. Would you want part ownership of the house until the debt was cleared? Or would it be alll theirs, with just a verbal agreement for the to make you monthly payments?

However, If you were in their husbands shoes and you were happily paying your mortgage, and then your father in law suddenly owned your house and you had to pay him rent, how would you feel about that? I wouldn't want my wifes parents suddenly having part ownership of our house. I'd rather the bank own it and maintain my mortgage payments to them.

[Scootersp]

LeadFarmer said:

Nice idea, and could make their payments interest free. Would you want part ownership of the house until the debt was cleared? Or would it be alll theirs, with just a verbal agreement for the to make you monthly payments?

However, If you were in their husbands shoes and you were happily paying your mortgage, and then your father in law suddenly owned your house and you had to pay him rent, how would you feel about that? I wouldn't want my wifes parents suddenly having part ownership of our house. I'd rather the bank own it and maintain my mortgage payments to them.

In an ideal world folks could work it all out and there would be an excess of money (not inconsiderable) that otherwise would go to the bank.

But as you point out there are emotions/hassles even when everything is going smoothly, throw in any future relationship issues and it becomes a minefield. I think perhaps a better way is to let your daughters know (if you haven't already) that they shouldn't worry overly about the mortgages and if they ever do to let you know?

[NickCQ]

Sounds like a recipe for a lot of SDLT and family arguments but not much return (mortgage rates are what, 1-2%?)
Might as well put the money in a low cost fixed income / corporate bond tracker to get a similar yield.

[Mr Whippy]

Yeah paying off kids mortgages but expecting anything in return is a minefield.

My Mum and Dad have done both ends of the spectrum.

The gift end has been fine without any issues later.
The non-gift end has been destructive to relationships between the family members.

Either gift or don't. Expecting anything back isn't helping.


If I had the lumps to pay off mortgages, I'd just find the best growth for it (locked away, start hammering lots into ISA if not already etc), and every year or so just gift an amount across against the mortgage within your allowances.
But I'd speak to an accountant to figure out the best approaches, and then my kids to ask what would help them the most.

[Sheepshanks]

LeadFarmer said:

However, If you were in their husbands shoes and you were happily paying your mortgage, and then your father in law suddenly owned your house and you had to pay him rent, how would you feel about that? I wouldn't want my wifes parents suddenly having part ownership of our house. I'd rather the bank own it and maintain my mortgage payments to them.

I wouldn't like it, although in a reverse situation we ended up part owning FILs house and he gave us a cheque every year at Christmas. That had to be formal in terms of ownership as a small interest only mortgage was taken to cover the gap. He was supposed to croak before the 10yr mortgage ended but he didn't so we paid it off.

I don't think anything formal is on the cards in my case - I guess if I took ownership I'd have to pay stamp duty, and at the higher rate now.

I seriously doubt either of my SILs would even notice if not specifically told - one definately wouldn't, and wouldn't care if he did know. The other one I'd be a little concerned about - he's self-employed and lives in a bit of a dream world, without the pressure of needing to bring some money in he'd probably just do craft stuff all day.

[irocfan]

Mr Whippy said:

A garaged Sunday car with low miles?

realistically though if things get that bad the car would also be practically worthless?

[Sheepshanks]

irocfan said:

Mr Whippy said:

A garaged Sunday car with low miles?

realistically though if things get that bad the car would also be practically worthless?

I've always taken the view that we get to the point where banks are going bust and people are losing their money then all bets are off.