Are your savings safe when a bank goes bust?

I’m not sure that banks should be expected to warn prospective customers about the outcome if the bank goes bust. Although it is reasonable to expect banks to warn prospective customers about market risk (irrelevant in the case of simple deposits), it is unreasonable to expect banks to warn about credit risk, particularly as doing so could cause the customer to doubt the credit risk of the bank.

The savings account pages on websites of my banks spell out the FSCS limits and associated banks names. Looking at account statements from my two banks, both spell out the FSCS limit and also all the trading names for the banks, so you should be are aware of the protection they give.
The question of a large deposit is tricky – a house being a good example. My son has just sold his without yet buying another, so has a large cash holding. The chances of his solicitor’s bank going bust is a remote possibility of course, but once he had his money he split it into several deposit accounts, each below the limit remembering to leave space for a little interest. Easy online, not so easy if you are not. I don’t see how we should be asked to compensate “special cases” like this – it just needs some foresight on our part.
I wonder what lottery winners do? I doubt they can find enough accounts to deposit all their winnings.
I also wonder if those banks who offer better interest rates but are not covered by the FSCS scheme tell us when we want to make a deposit? Which? might have found that worth investigating.

I guess the argument I should have used is that if an individual brand goes “bust” that’s part of a larger group chances are it’s the group going bust as by now, many of the individual brands systems will have been merged into a group system. Taking all the recent IT failures, you start off with people noticing one brand having problem then within minutes 2, 3, 4 other brands are reported well its no surprise as they’ll all use the same IT system. And its not just IT systems that would have been merged.

All in all I think its easier to force all the brands to share the same name.

Would a pension pot be covered by the £85k limit? Cos if that’s the case £85k is not a lot and surely if the government want people to save maybe they should be a special case.

I don’t think it would be that difficult for the banks and building societies to print an infornation notice on the statements [and on-line versions if appropriate] as soon as the balance on an account gets close to the £85k FSCS full compenstaion limit.

The question of funds held in a bank account during and immediately after a property transaction, or any other significant asset disposal, is certainly worth attention. The financial climate now is quite worrying for a lot of people when multi-billion pound bank losses are being reported; we all criticise excessive bank profits but nobody wants to have their money in a loss-making bank so some shuffling of accounts is almost bound to occur and one or more institutions could become over-exposed. There is a technical difference between a huge current trading deficit and insolvency, but the niceties of the distinction are probably lost on most customers.

Savings accounts are generally regarded as relatively safe ways to save money, so it makes sense to tell customers if they wish to make a deposit above the FSCS limit. I wonder what percentage of customers who do make deposits of this amount of money are aware of the limit.

It isn’t easy to open a new bank account now if you are over 90 and no longer have a current passport or driving licence. So it may not be as easy as you think to spread the risk. HSBC used to allow the Blue Mobility Badge as ID but apparently despite this being listed in their literature the new one is not acceptable.