Worried About Your Savings?

[spoon]

I am. I have a lump in HBOS and NATIONWIDE. Anyone else worried?

It may turn out that my cash will eventually be guaranteed by the govt as per Northern Rock but i don't want to expend the mental capital on it. In any case nationalisation of the banks will devalue our cash holdings so it makes sense to diversify now.

So what are the options and the pros and cons?

1) National savings

2) UK gilts

3) Northern Rock

Any others?

Pls lets keep gold out of this thread. I know it's going up and and i can take that view using my TRADING capital.

This thread is relevant to all HPC-ers that have sought to preserve their wealth by remaining in cash. That decision now needs tweaking. Forget about returns ON your cash...the return OF your cash is paramount now.

Edited March 16, 2008 by spoon

[A.steve]

Forget about returns ON your cash...the return OF your cash is paramount now.

I took that view in November 2007. Now I'm looking for safe returns.

It is my view that it is "extremely unlikely" that savings held by any mainstream bank will ultimately be forfeit - in nominal terms. I think that if the £35K limit per group of banks is observed, this is reduced to "extremely unlikely squared".

I think that investment bonds; pension funds etc. are at risk... and I'm more nervous about term accounts than instant access. My compromise has been to seek out savings accounts with "instant access with interest-rate penalties on withdrawal" - since, if I withdraw it will be because I no-longer want the account for some reason - and I'd withdraw 100%.

I'd be very interested in a detailed survey of savings accounts... I'm frustrated by league tables, since there always seems to be some small-print associated with the accounts with the largest numbers. I understand the Northern Rock argument - for its government guarantee... and competitive rates... but I feel they are are rather volatile... I imagine being "messed about" - which I'd like to avoid.

[beefheart]

I am. I have a lump in HBOS and NATIONWIDE. Anyone else worried?

It may turn out that my cash will eventually be guaranteed by the govt as per Northern Rock but i don't want to expend the mental capital on it. In any case nationalisation of the banks will devalue our cash holdings so it makes sense to diversify now.

So what are the options and the pros and cons?

1) National savings

2) UK gilts

3) Northern Rock

Any others?

Pls lets keep gold out of this thread. I know it's going up and and i can take that view using my TRADING capital.

This thread is relevant to all HPC-ers that have sought to preserve their wealth by remaining in cash. That decision now needs tweaking. Forget about returns ON your cash...the return OF your cash is paramount now.

im in NS&I instant access.

Limit of 100k though.

Get your money into ns&I - 90k

Get an NS&I ISA.

Premium Bonds?

Then put upto 30k in Northern Rock

Surplus into gold/Silver + cash.

[right_freds_dead]

I am. I have a lump in HBOS and NATIONWIDE. Anyone else worried?

It may turn out that my cash will eventually be guaranteed by the govt as per Northern Rock but i don't want to expend the mental capital on it. In any case nationalisation of the banks will devalue our cash holdings so it makes sense to diversify now.

So what are the options and the pros and cons?

1) National savings

2) UK gilts

3) Northern Rock

Any others?

Pls lets keep gold out of this thread. I know it's going up and and i can take that view using my TRADING capital.

This thread is relevant to all HPC-ers that have sought to preserve their wealth by remaining in cash. That decision now needs tweaking. Forget about returns ON your cash...the return OF your cash is paramount now.

yeah your cash is guaranteed alright.

guaranteed not to be paid out immediatley AND in small govt controlled approved installments right when you need it the most.

you wont be able to just put a claim in and get a check back in 3 weeks for the balance.

what are you thinking. this is a massive secured government loan right there in deposits.

your not having it to buy speedboats with.

[spoon]

I have a large sum invested in the Bank of Scotland (read Halifax) Reward Account. They offered a decent 6.30% back in Jan on 1yr fixed term savings with up to 4 penalty free withdrawals allowed.

I agree it is unlikely that my stash might be under threat but i'd rather move to a safer place. I'm thinking of shifting the whole lot to National Savings Easy Access paying 4.65% gross.

[right_freds_dead]

people like ed balls or david cameron need your money right there as they think up new ways to prevent smoking in public, war on fatties and more id cards.

in the meantime you can shore up a really insane banking bubble for the next 4 years while things recover.

expect a full payout of secured deposits, but only in £500 lumps every three months for the next 10 years.

Edited March 16, 2008 by right_freds_dead

[beefheart]

yeah your cash is guaranteed alright.

guaranteed not to be paid out immediatley AND in small govt controlled approved installments right when you need it the most.

you wont be able to just put a claim in and get a check back in 3 weeks for the balance.

what are you thinking. this is a massive secured government loan right there in deposits.

your not having it to buy speedboats with.

this is a very good point.

but there are risks with having 100oz of gold lying around.

[spoon]

yeah your cash is guaranteed alright.

guaranteed not to be paid out immediatley AND in small govt controlled approved installments right when you need it the most.

you wont be able to just put a claim in and get a check back in 3 weeks for the balance.

what are you thinking. this is a massive secured government loan right there in deposits.

your not having it to buy speedboats with.

you lost me ?

[beefheart]

people like ed balls or david cameron need your money right there as they think up new ways to prevent smoking in public, war on fatties and more id cards.

in the meantime you can shore up a really insane banking bubble for the next 4 years while things recover.

expect a full payout of secured deposits, but only in £500 lumps every three months for the next 10 years.

do you think this can/will happen with NSI or just failed private banks?

[spoon]

im in NS&I instant access.

Limit of 100k though.

Get your money into ns&I - 90k

Get an NS&I ISA.

Premium Bonds?

Then put upto 30k in Northern Rock

Surplus into gold/Silver + cash.

I thought the limit on NS easy access was £2 million?

[beefheart]

you lost me ?

if a number of big banks fail the money guaranteed by the govt will have to be applied for and will not just be given back instantly.

[spoon]

if a number of big banks fail the money guaranteed by the govt will have to be applied for and will not just be given back instantly.

why do u say that? perhaps i'm a bit behind the game here. are you saying current NR depositors have to APPLY for their cash? or you mean the situation will be THAT dire once the number of Northern Rocks increases?

[right_freds_dead]

this is a very good point.

but there are risks with having 100oz of gold lying around.

its in an expensive safe. if things get risky crime wise ill move it into a secret location and cement it into the floor in a plastic tub.

you lost me ?

they are not just going to let people empty the kitty.

they will pay your deposits back in bits. slowly at a pace that suits them - not you.

[beefheart]

why do u say that? perhaps i'm a bit behind the game here. are you saying current NR depositors have to APPLY for their cash? or you mean the situation will be THAT dire once the number of Northern Rocks increases?

no in the event of an argentina style crisis this MAY be the case.

[right_freds_dead]

beefy, were tearing them up today. i hope you checked your car brakes....

[volvos60]

Anyone who is worried about having money invested with HBOS or any other bank should move it to one of the many prudent mutual building societies - I think by law they cannot raise more than 50% of their funds externally. Eg. I'm with Skipton BS and about 64% of their lending comes from depositors money.

Northern Rock was/is a bank that raised something like 75% of it's funding from wholesale money markets - with the exception of NR which is now government backed, everyone should keep as little money in banks as they need to. This whole financial mess is related to banks and keeping money invested with them is taking an unnecessary risk IMO.

Catflap, you are right on the money! My IFA advised me to get money away from banks & into the larger building societies without delay about a month ago. He had no commission to be earnt from saying that & was just gving me genuine advice as the BSs are less leveraged than banks. Personally, I did not need telling twice & had it all transferred within a week.

I suggest go for the larger building societies only, check out the Building Societies Association website for info on their size relative to eachother.

In reality there are only a few players. Even though some, such as the Nationewide, are offering less than leading rates, that is a small issue compared to loss of capital

[right_freds_dead]

im worried about my head being in the mouth of this hungry lion, so ill move it into the mouth of this hungry leopard instead.

should ok.

[redgenieuk]

It is my view that it is "extremely unlikely" that savings held by any mainstream bank will ultimately be forfeit - in nominal terms. I think that if the £35K limit per group of banks is observed, this is reduced to "extremely unlikely squared".

or "the square root of extremly unlikely"?

[A.steve]

or "the square root of extremly unlikely"?

I apologise for my pseudo-math.

Probabilities are conventionally in the range 0..1 (inclusive) - so, if we have a probability that my bank is allowed to become insolvent is P( b ) - and the probability that the the £35K guarantee is not proved good is then, and only then P( f ).

The probability that I depend upon the guarantee is then P( b ) and the probability that the guarantee is not honoured is P( b )*P( f ) - which can be no-larger than P( b ) alone.

I think (and don't intend to justify - since it is a hunch) that both P( b ) and P( f ) are "extremely small" (i.e. extremely unlikely) - hence "extremely unlikely squared."

Edited March 16, 2008 by A.steve

[Dr House]

Good post. My concern about the Crock is that every single corpuscle in my body reacts against putting even 5 pence into Ron Sandler and Gordon Brown's little EXPERIMENT. £80k per week Sandler is paid to make the thing look irresistible, but CAN WE EVER TRUST THE GOVERNMENT NOT TO CHANGE THE TERMS IN THE SMALL PRINT IF THE GLOBAL S**8t HITS THE FAN?

And yes, there is a part of me which thinks it is wholly unethical to have money in that pariah of a bank..............................

Go HSBC or Lloyds - and NSandI if you are uber cautious. Mattress is next stage down.

[Fergie]

I'm working on the principal that any major clearing bank is OK. If a clearing bank is in trouble, they'll do anything they can to keep it afloat and keep the problems out of public knowledge, imo. A major clearing bank going down would hit not just savers, but anyone being paid through them, VISA/ACCESS payments, the faster payments project for paying through websites etc. I just can't see major problems with one of these guys ever troubling the British public.

I could be horribly wrong, of course.

[Panda]

Anyone who is worried about having money invested with HBOS or any other bank should move it to one of the many prudent mutual building societies - I think by law they cannot raise more than 50% of their funds externally. Eg. I'm with Skipton BS and about 64% of their lending comes from depositors money.

Northern Rock was/is a bank that raised something like 75% of it's funding from wholesale money markets - with the exception of NR which is now government backed, everyone should keep as little money in banks as they need to. This whole financial mess is related to banks and keeping money invested with them is taking an unnecessary risk IMO.

http://en.wikipedia.org/wiki/Building_society

I have to also agree with this statement. Get your savings in the mutuals, the top ten building societies. I do feel and have been advised by an IFA that this is the safest place!

So, at Numero Uno, we have;

........................................Asset share

1 Nationwide Building Society £150,586m

2 Britannia Building Society £32,431m

3 Yorkshire Building Society £16,298m

4 Coventry Building Society* £11,090m

5 Chelsea Building Society £9,656m

6 Skipton Building Society £9,156m

7 West Bromwich Building Society £7,208m

8 Leeds Building Society £7,065m

9 Derbyshire Building Society £5,097m

10 Cheshire Building Society £4,678m

11 Principality Building Society £4,384m

12 Newcastle Building Society £3,863m

13 Norwich & Peterborough Building Society £3,403m

14 Stroud & Swindon Building Society £2,514m

15 Nottingham Building Society £2,428m

16 Dunfermline Building Society £2,318m

17 Scarborough Building Society £1,733m

18 Kent Reliance Building Society £1,619m

19 Progressive Building Society* £1,248m

20 Cumberland Building Society £1,185m

21 National Counties Building Society £956m

22 Furness Building Society £770m

23 Cambridge Building Society £751m

24 Saffron Building Society £662m

25 Leek United Building Society £661m

26 Hinckley & Rugby Building Society £649m

27 Manchester Building Society £565m

28 Newbury Building Society £565m

29 Darlington Building Society £548m

30 Monmouthshire Building Society £485m

Edited March 16, 2008 by Panda

[Errol]

This thread is relevant to all HPC-ers that have sought to preserve their wealth by remaining in cash.

I'm not sure you can preserve your wealth in a fiat currency that is currently inflating at 12%+ a year (16% for the Dollar).

[spoon]

I'm not sure you can preserve your wealth in a fiat currency that is currently inflating at 12%+ a year (16% for the Dollar).

I agree this is an issue we need to think about. But I'm not sure one needs to exit fiat currency 100% in order to protect oneself - the alternatives do carry their own risk. The first stage for most investors i imagine is to find a SAFER place for their fiat cash and that is the topic of this thread.

[jonpo]

how about INXG.L all maturities index linked gilts. open yourself a crest account in your name and job done...