It is unlikely that any UK bank will collapse. However, if you are fortunate enough to have savings tucked away, it is important to know that they are safe.
Firstly, make sure your bank is regulated by the Financial Services Authority, a body set up to regulate financial markets and protect consumers.
Who is regulated by the FSA?
All UK registered banks and building societies and certain foreign banks that operate in the UK.
How do I know if mine is one of these?
It will be stated on their website. You can also check on the FSA register:
www.fsa.gov.uk/register/home.do
What happens if an FSA regulated bank goes bust and I lose my savings?
The FSA operate a Financial Services Compensation Scheme (FSCS). This means that if the bank goes bust they pay compensation to those who lose money. They compensate up to £50,000 per person, per institution. UK registered banks are fully covered by this scheme.
Some foreign banks that operate in the UK do so through UK subsidiaries, meaning that they operate in exactly the same way as UK banks and their customers receive the same compensation.
However, some foreign banks operating in the UK are registered differently and do not have UK subsidiaries. This means:
· They may be partly covered by the FSCS scheme and partly covered by their home compensation scheme.
· If you had to claim compensation you would have to apply to an overseas scheme and would be reliant on a foreign government.
· If things were to go wrong the UK government may not be in a position to step in and help.
When you sign up to a new bank you can check their website to see if they are FSA regulated and if they are 100% covered by the UK FSCS, or if not, to which country you would have to claim compensation from.
How long would it take to get compensation?
The FSCS predict about 3 months. If you need to be able to access money in an emergency, one option would be to split savings between banks so that if you cannot access one deposit you can use the other.
Information for those with savings in Icesave:
The Icelandic bank Icesave hit problems in October 2008 that resulted in its UK customers having to claim back compensation for their savings. The UK government has promised to compensate all UK savers 100% of their savings in Icesave after the Icelandic government was unable to honour its promise to compensate UK savers. This means that if you had money in Icesave you will receive the full amount back.
How can I get it back?
The FSCS should contact all Icesafe customers in time to arrange compensation. In the meantime, if you are able to log-in to your bank, print out a statement to ensure a smooth claiming process. This is not essential but may be useful.
My student loan was paid into Icesafe. What I can do?
As Icesafe only had savings accounts hopefully loans for living costs will not have been paid in. However, if you did need money that you paid into Icesafe there are a few options you can explore:
· Home students can apply to their University Hardship fund. Most Universities offer short-term loans to those who get their loans late. If you have dependents they may offer further emergency help that you will not have to pay back. See www.money4medstudents.org/content.asp?id=159 for more details.
· Some Universities have International Hardship funds that help international students who are struggling due to unforeseen events out of their control. See www.money4medstudents.org/content.asp?id=473 for details of individual funds or contact your student funding office to see if there is anything available.
· Independent Charities and Educational Trusts often fund students who are short of money due to events that are out of their control. See www.money4medstudents.org/content.asp?id=225 for details of trusts and how to search online for more.
· See ‘Is your loan late’ for tips on how to deal with everyday living costs whilst waiting for money to come through. www.money4medstudents.org/content.asp?id=512 | 
RSS |
Site map |
About us |
Contact us
