How safe are my savings?

Recent events in the global financial markets have shaken the confidence of savers, with many panicking about the safety of their cash deposits.

Over the past year, some of the world’s biggest financial institutions have run into massive difficulties, having to be bailed out by the Bank of England and shareholders, and as a result, savers have become increasingly worried about the safety of their own cash. In response, the FSCS has raised the compensation limit to £50,000, per individual per authorised institution.

But, although the new limit is good news for savers, things are not as straight forward as they seem, explains Kevin Whitmarsh, Financial Services Partner at, Old Mill.

“The guarantee is per financial institution, not per account and banks that share the same Financial Services Authority (FSA) registration number count as one financial institution.”

For example, if you have £50,000 saved with Abbey and £50,000 saved with Cahoot, as these two brands share the same FSA registration number, only the first £50,000 would be guaranteed.

If instead you had £50,000 saved with Abbey and £50,000 saved with Lloyds TSB, the entire £100,000 would be guaranteed as they are different financial institutions.

“Understandably, people are concerned about their savings,” says Mr Whitmarsh. “Many have sensibly spread their assets, but are now wondering if they are going to get caught out as so many banks and building societies have been bought out or are being forced to merge.”

“At Old Mill, we fully acknowledge these concerns. That is why we are constantly researching this area of the marketplace to ensure our clients have the strongest possible capital protection along with tax efficiency to maximise returns.”

Old Mill offers a specialist cash management service which can be tailored to clients based on their level of savings.

“For those with savings below £100,000 we would consider the following; the £50,000 compensation limit, the protection offered by the UK Government to deposits in Northern Rock, the guarantees offered by the Irish Government and National Savings and Investments.

For those with savings in excess of £100,000 we would consider all of the above and the tax efficiency and flexibility offered by offshore bonds, the institutional rates of interest available from deposit accounts via offshore bonds and gaining access to liquidity funds.”

If you are concerned about your savings and would like to speak to an Old Mill Consultant about the specialist cash management service, visit oldmillgroup.co.uk