This is all about the FSCS.

My wife and I have £70k in a joint HSBC account so hopefully 100% of that is guaranteed (100% x 35k x 2)

But we each have £35k in a First Direct account in our individual names.

Am I correct in thinking that we only have a guarantee of 90% of the next £20k on the First Direct accounts under the FSCS scheme because HSBC own/or are heavily connected with First Direct.

Two more points. I have spoken to First Direct today and they couldn't/wouldn't tell me the answer (they just swear that they have "nothing to do with HSBC" ), and secondly, how do readers of this topic view my risk if I leave things as they are ?

Thanks to anyone who replies.

Scooby

I thought the £35K only covered one banking group, so HSBC and First Direct are effectively different brand names of the same bank.

http://www.firstdirect.com/legals/siteterms.shtml:



http://www.hsbc.co.uk/1/2/about:



So, as far as the FSA is concerned, HSBC and First Direct are one and the same.

Ideally, therefore, you would not have more than £35k per person in these two at the same time.

Thank you Fed up (so am I actually - I got another speeding NIP yesterday )

It would be nice to think that you are correct but I suspect that you are not (see the later post from Ologhai Jones)

So it look as if I have got to open yet another joint account with all the attendant garbage if I do it on-line.

Actually, if the Banking system really does go into melt down I just can't see enough money in the pot to pay us all out. Mervyn gave some backing yesterday but where does he get his money from ?

Thanks again.

Don't mine and Fed Up's posts agree with each other?

Yes, you are probably correct. I have just re-read Fed Up's post again and it was the "different brands" that threw me, coupled with the fact that whenever I have managed to speak to First Direct they are always at pains to point out that "they have nothing to do with HSBC" Sorry to Fed Up for the mis-understanding. I tried to edit my post but I'm not allowed to do it for some reason.

The deciding factor, according to the FSCS web site, is whether the two banks are separately "Authorised" by the FSA and they're not so that makes it fairly plain.

But no one has expressed an opinion as to how safe these chunks of £35k are anyway. Is it fact that if the whole thing melts down then there won't be enough money in the scheme to even pay investors anything like 100% of £35k ?

I guess the truth is that no one really knows what will happen if the compensation scheme actually has to be used. Some have argued that, if it comes to it being needed, then it'll mean the banking system would be so screwed, that we're all done for anyway.

However, if we're just playing with relative probabilities, I would say that keeping to the £35k limit can only increase your chances of not losing money, so, for me at least, that makes it a no-brainer.

Ologhai's reply was a bit more articulate than mine, but the point was the same. If you have £100K in savings, you should spread the risk and look for about half a dozen different accounts for it. For the next 12 - 24 months look for fixed rate accounts or bonds, as the BoE is likely to be lowering the base rate. Shop around now and there are quite a few offering about 6.5% gross. If HBOS is NR2, then A&L and B&B are probably not far behind. Elsewhere on this forum someone has recommended Co-op bank as least likely to be exposed to the sub-prime market. Check building societies also as they are not allowed to be as highly geared as the banks.

Thank you Fed Up. What really pees me off is the fact that I have worked damned hard for this money for the last 45+ years and yet I just can't sit back and relax a bit now. No, I've still got to concentrate like hell (and that is harder as you get older) just to make sure that I don't loose the bloomin' lot.