Worried About Your Savings?

[whoami]

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.

I wouldn't put too much faith in the building societies if I were you - one or two of the bigger ones (e.g. Nationwide) have had a dabble in some iffy securities too. And when the HPC really comes ashore in the UK in about twelve months time, they're all going to get heavily smacked with a tsunami of defaults and jingle mail walkaways. There will certainly have to be a few 'supportive' mergers to ensure they all survive.

Currently by far the best combination of security and return on capital is offered by Northern Rock. They're now entirely, 100%, owned by the treasury, just like the BOE and NS&I, and your deposits are totally guaranteed however much you give them. If you were lucky enough to get a piece of their recent 6.9% instant access bond then you are quids in on every level. Ironic, considered their previous incarnation started all these bank worries in the UK.

Edited March 16, 2008 by whoami

[Panda]

I wouldn't put too much faith in the building societies if I were you - one or two of the bigger ones (e.g. Nationwide) have had a dabble in some iffy securities too. And when the HPC really comes ashore in the UK in about twelve months time, they're all going to get heavily smacked with a tsunami of defaults and jingle mail walkaways. There will certainly have to be a few 'supportive' mergers to ensure they all survive.

Currently by far the best combination of security and return on capital is offered by Northern Rock. They're now entirely, 100%, owned by the treasury, just like the BOE and NS&I, and your deposits are totally guaranteed however much you give them. If you were lucky enough to get a piece of their recent 6.9% instant access bond then you are quids in on every level. Ironic, considered their previous incarnation started all these bank worries in the UK.

A Building Society fail? A merger yes, ten mergers, yes, so maybe windfalls yes , but i do not see you losing your savings held within a Building Society, they are safer than the Bank of Gordon?

[The Masked Tulip]

I was surprised how low the IRs are that Britannia offers to savers when I investigated them about a month ago - assumed they must be safe if they are offering so little but then I learnt that they own some company which is a big BTL lender. Forget the name.

[papag]

I was surprised how low the IRs are that Britannia offers to savers when I investigated them about a month ago - assumed they must be safe if they are offering so little but then I learnt that they own some company which is a big BTL lender. Forget the name.

I transfered my mini cash Isa to them got 6.85% until dec 08,also just got a small cheq from them re profits in the accompanying litrature said somthing about profits being down due to somthing it had invested in maybe it was the BTL firm.

[justAnotherFTB]

Man you guys are paranoid - I mean we all saw Northern Crock coming, and I'm sure there will be other casualties along the way - but remember one thing....Despite Northern Rock being a chronically irresponsible lender run by muppets, the government bailed them out.

Surely they have set a precedent now which make it pretty much impossible for the likes of HBOS etc to fail?

IMO Nationwide is a pretty safe home for your cash, and spreading 35k amongst the biggest highstreet banks should be pretty much as safe as you can get without burying it in your back garden!

NS&I are another option - the RPI linked savings certificate are another way of stashing 30k (15k per 3/5 year issue) and provides a risk-free hedge against inflation taking off in a major way.

[The Masked Tulip]

I transfered my mini cash Isa to them got 6.85% until dec 08,also just got a small cheq from them re profits in the accompanying litrature said somthing about profits being down due to somthing it had invested in maybe it was the BTL firm.

Wow, is that a fixed rate?

[papag]

Wow, is that a fixed rate?

Yes transfered mrs Papags as well it was on offer around August last year it was quickly over subscribed pleased with my investment there however wont go on about my others.

[NotMyHouse]

Erm - re. the Crock and NS&I - NS&I pays around 5% in instant access bonds, NR pays 6.25% with online saver. Difference to me is about what I'm having to pay to subsidise the Crock as a taxpayer.

But the govt. guarantee is here. And they have to give three months notice to change this guarantee.

As far as I'm concerned, this is a no-brainer. NR is as guaranteed as NS&I, but pays 1.25% more.

Brown and Darling would rather slit their throats with rusty razors than let NR fail. I think NR is as safe as cash gets at the moment.

[Ah-so]

Erm - re. the Crock and NS&I - NS&I pays around 5% in instant access bonds, NR pays 6.25% with online saver. Difference to me is about what I'm having to pay to subsidise the Crock as a taxpayer.

But the govt. guarantee is here. And they have to give three months notice to change this guarantee.

As far as I'm concerned, this is a no-brainer. NR is as guaranteed as NS&I, but pays 1.25% more.

Brown and Darling would rather slit their throats with rusty razors than let NR fail. I think NR is as safe as cash gets at the moment.

You forget that some NS bonds are tax free, making them the equivalent of a much higher rate. Index-linked bonds are especially good in this rising inflation/falling interest rate environment.

[spoon]

You forget that some NS bonds are tax free, making them the equivalent of a much higher rate. Index-linked bonds are especially good in this rising inflation/falling interest rate environment.

True but not very practical if you have several multiples of the 15k allowed per issue to invest.

[The Masked Tulip]

You forget that some NS bonds are tax free, making them the equivalent of a much higher rate. Index-linked bonds are especially good in this rising inflation/falling interest rate environment.

No they are not. If you are a tax payer you get the interest gross and have to pay the tax yourself unlike a bank where tax is deducted at source.

[Guest grumpy-old-man]

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."

A. Steve,

that's why we are in this bl00dy mess right now, software programs predicting if things are 'safe' or not.....everythings just ones & zeros ffs, gut instinct & experience are much, much better imo.

[chichi]

What can you do with business savings though?

[headmelter]

Mrs HM and myself have a few cash ISAs spread around. Theone which I'm definately moving is with A&L, probably to Nationwide but I might look at NR if they accept transfers in.

Anyone know how safe the Abbey Nat are? I've some in there as well but I haven't heard any worrying news about them..........yet.

[tuggybear]

Yep I'm very worried

Im planning (subject to HPC sucrutiny) to open a Lloyds International Money Market Call Account tommorow morning.

where i intend to put my STR in a Euro account.

My reasoning is that HPC has just reaching Blighty, we have seen what is happening in the currency markets, the devaluing USD ( and GBP tracker already) against all other currancies.

So what happens to GBP when Sh@t hits the fan over here?

Please tell me if this is a bad call and the Euro is over-inflated already!

i'm breaking law number ONE... never invest in something you do not understand.

[MarkG]

Brown and Darling would rather slit their throats with rusty razors than let NR fail. I think NR is as safe as cash gets at the moment.

But they don't run the country anymore: Brussels does.

I'm sure that Brown and Darling would want to bail out any significant UK bank that was close to failure, the way they have with Northern Wreck; but they can't do it if the Eurocrats won't let them. They're just local administrators for the EU now.

[DrBob]

No they are not. If you are a tax payer you get the interest gross and have to pay the tax yourself unlike a bank where tax is deducted at source.

Really? I think they actually are tax-free, you know. From the NSANDI website:

http://www.nsandi.com/products/ilsc/index.jsp

http://www.nsandi.com/products/ilsc/index.jsp' rel="external nofollow">

Index-linked Savings Certificates

Inflation-beating savings with tax-free returns

With our inflation-beating savings, the value of your investment increases in line with inflation as measured by the Retail Prices Index (RPI) and earns guaranteed interest rates on top -

with all your returns tax-free (which means that all returns are free of UK Income Tax and Capital Gains Tax)

. So you can be sure to keep ahead of rising prices.

Because inflation fluctuates, you won’t know exactly how much you are going to receive until your Certificates mature. But you can be sure that your money will have more spending power.

Sounds like a great idea, unless you think the UK treasury is insolvent

[Once in a lifetime]

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.

Spoon I remember you saying a couple of years ago that you had over £800,000.00

Unless it was a typo you'd be better off buying property rather than sticking it in the high street Banks.

[cartimandua51]

Mrs HM and myself have a few cash ISAs spread around. Theone which I'm definately moving is with A&L, probably to Nationwide but I might look at NR if they accept transfers in.

Anyone know how safe the Abbey Nat are? I've some in there as well but I haven't heard any worrying news about them..........yet.

I don't know how safe AN are, but their customer service and administration are a byword for abysmal - see any edition of the money problems agony aunts in the newspapers!

[Scott]

Spoon I remember you saying a couple of years ago that you had over £800,000.00

Unless it was a typo you'd be better off buying property rather than sticking it in the high street Banks.

Eh? I thought you were a bear?

Why put £800,000 on a depreciating asset?

Wait until they drop 40% and then buy the equivalent of an £1.33million house.

No brainer!

[Panda]

Spoon I remember you saying a couple of years ago that you had over £800,000.00

Unless it was a typo you'd be better off buying property rather than sticking it in the high street Banks.

£800,000.00, if that is to be the case, i would also be a tad bit worried?

£800,000.00/35k = 23 mutual B/S, that would do it, a full time job managing them all though?

[Once in a lifetime]

Eh? I thought you were a bear?

Why put £800,000 on a depreciating asset?

Wait until they drop 40% and then buy the equivalent of an £1.33million house.

No brainer!

Ah ha... I didn't say which country?

Just £90,000 buys you a 5 bed house with indoor swimming pool in Florida !

Although I'll be honest and say I'd buy here if I had that much....

For me a house is a home to live in, not speculate with.

[The Masked Tulip]

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%.

Why do you feel that bonds, etc, are more at risk than instant access? Is it simply that you can get yoru cash out if you start to hear that A&L, B&B, wheover, are in trouble and will not be able to do that with a bod? Or is it something else?

[grey shark]

£800,000.00, if that is to be the case, i would also be a tad bit worried?

£800,000.00/35k = 23 mutual B/S, that would do it, a full time job managing them all though?

Tell me about it

[housespider]

£800,000.00, if that is to be the case, i would also be a tad bit worried?

£800,000.00/35k = 23 mutual B/S, that would do it, a full time job managing them all though?

I've got a brilliant idea - Give me half of it and your problem will be halved.....