Kevin's Blog

Diary of an Icesave Customer (Part 3)

2008-11-18T09:33:00Z

Not much movement as yet in terms of how I get my money back from Icesave. Last week the Financial Services Compensation Scheme website said that they were hoping to get the arrangements sorted out by the end of the week. Now its next Friday.

I did enjoy reading the Treasury announcement about the UK delegation going to Iceland to discuss the debacle. It stressed that the discussions were held in a 'friendly atmosphere'. So what was it? Lots of high powered Treasury Officials sitting round in party hats cracking jokes and passing round the jammy dodgers? I think not.

I bet the Prime Minister of Iceland is having a wry smile. RBS, LloydsTSB and HBOS all effectively taken into public ownership over the weekend. Iceland doesn't seem quite such a bad bet then. There's a big difference of course, ie the UK banks are still functioning and there seems to be some real leadership now to make sure that position doesn't change. Messrs Brown and Darling all of a sudden are looking like paragons in terms of managing the situation.

It seems that the Treasury have also made arrangements to make sure the ISA tax benefits are still retained, so I won't be losing out at all. Good news.

So, it looks like there won't be much of an update on how I get the money back for a few days while the Reykjavik party carries on.

Macaroon anyone??

Diary of an Icesave Customer (Part 2)

2008-10-09T08:56:00Z

So I was right to be worried about where the money was going to come from to cover the Icelandic compensation scheme. It appears the cupboard was bare and the Icelandic Government have been quoted by the Chancellor as having no intention of meeting their obligations. Isn't that the point of an obligation, that you are obliged to keep to it? Hope they lose their World Cup qualifiers.

I strongly suspect that the Icelandic assault on the UK savings market is now dead and buried. First Icesave, then Heritable Bank and now Kaupthing have all been taken into public ownership. ING look like a white knight, but would I trust another overseas bank. I'll admit my confidence has been shaken. Maybe I'll stick to a UK Building Society which seem immune to all the current shenanigans.

Back to Icesave. That nice Mr Darling has promised to meet all of the UK savers deposits in full. To me that is a strong statement that the Government will look after Britons affected by a banking crisis which is not of their making. I'm relieved, but I must admit, I was surprised when they said they would cover 100% of savings, even over the £50,000 limit. Sets quite a precedent.

So what's the Icesave claim process? The Financial Services Authority and Financial Services Compensation Scheme are telling savers not to contact them, and that they will be contacted direct. So no point asking how to claim my Icesave savings back.

I guess that means Icesave will be sending data on 300,000 customers to the Compensation Scheme people. Hope they do a better job of that than the Government have managed recently! They'll probably find it on a laptop in Tesco's car park somewhere.

On the ISA tax benefits front, when everyone took their Cash ISAs out of Northern Rock, the Government gave special dispensation to people to use the money to take out other ISAs and keep the tax benefits. Hopefully they will do the same for Icesave customers.

I look forward to my letter from the Compensation Scheme...

Diary of an Icesave Customer

2008-10-07T15:08:00Z

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.....