Diary of an Icesave Customer

 So I read with interest that Icesave has been placed in liquidation by the Iceland Government. Not good news, I have cash ISAs with those guys...how did I get into this?

 Rewind 7 months. I have cash ISAs elsewhere which are underperforming and its about time I did something about it. Having just become employed by Moneyfacts, I'm now aware of their comparison tools. The best buy for cash ISA is Icesave. No point messing about with second best, so lets have a look at their site. All looks OK. But someone tells me that Icelandic banks shouldn't be trusted because they are over-exposed to UK deposits.

 Being a detail freak, I thoroughly look through the website. They are authorised for UK business by the FSA, and have chosen to top-up their compensation arrangements to the same as a UK bank. Hats off. These guys want to look after me. Anyway, things aren't that bad and they'll be fine.

 Today.....oops. Seems not.

 So the Icelandic Government have implemented emergency legislation, and immediately seized control of Landsbanki, who run Icesave, and placed them into liquidation.

 Don't panic. My savings are covered by the compensation scheme. It'll be a load of hassle to get the claim through, and I'll probably lose the tax benefits from my ISA, but at least I don't have more than the maximum protected amount of £50,000 so I'll get it all back.

 A little more investigation. UK savers have £4bn with Icelandic banks. I suspect the others are suffering badly and people are trying to get their cash out. It can only be a matter of time before they go too. To top that, the Russians are pretty much propping up the Iceland economy to make sure the whole country doesn't go bankrupt.

 So where's the money going to come from? I know the UK scheme is funded by all the companies authorised in the UK. There are thousands so the risk is spread. What's it like in Iceland. There can't be that many authorised firms paying in, and if the big banks go bust, what then? I'm worried.

I read on the web about a gentleman who has £75, 000 with Icesave. He's going to lose out bigtime. There's always someone worse off than yourself.

 The UK Financial Services Compensation Scheme are making all the right noises, simple claim process, quick payouts. Mmmm. We'll see.

I'll let you know how I get on.....