Banking and savings

There is a significant chance of banks going under. We've seen it happen already in the UK with retail banks and investment banks in other countries have put themselves in administration (a form of bankruptcy), been sold or are considering mergers.

HBOS is the most susceptible bank in the UK. It is currently in talks with another bank to be bought out (which would pretty much ensure retail savings aren't at risk of a bank run). However, there is no guarantee the buy out will happen.

The general advice is that you should absolutely split any sums of money above £35k up and put them with separate banks. There is some talk that the £35k threshhold may be increased to £50k, but I wouldn't be relying on that.

Neither the FSA, BoE or the government want banks to go under, but there is a current push for governments not to intervene in banking (particularly investment banking) failures. I think it far less likely that a retail (consumer) bank will be allowed to go, but stranger things have happened.

Your father has nothing to lose by setting up multiple accounts. Hopefully there will be no issue with savings kept at Halifax/HBOS - but why would you risk it?

If it was me, just to be ultra cautious I would spread the money around. It's worth bearing in mind that the £35,000 payout is per financial institution, so it's worth checking who owns what bank. I'm sure there was something on moneysaving expert about this.

I've been reading every single media report there is today (mainly because I work for HBOS) and they have all said that there is no chance that HBOS will go under. It is too big a player in the financial institutions and it going under would cause chaos in the British Banking system. The Government would bail it out if this was going to happen however I believe the take over by LLoyds is pretty much a done deal so I wouldn't worry too much.

Hope that helps.

This article is worth a read

https://www.moneysavingexpert.com/savings/safe-savings/

He hasn't got the money yet, it should be coming in a couple of weeks. I've just been reading money saving expert and they say that you would be protected up to £70,000 if it was a joint account. Or they could just spread the money around so the don't have more than £35,000 with one financial institution.

Hi

Just thought i'd add. If you read the article from Money saving expert its worth taking note that the £35000 is not just with one financial institution but per financial group e.g cahoot and Abbey are in the same group so you are only protected to £35000 across the two of them.

Sorry for bumping this thread, but my Dad is in a similar situation right now. It would be great if someone could tell me whether the choice of the bank plays any role here.

Thanks in advance.