UK to compensate all Icesave customers

The Chancellor has today agreed to guarantee 100% of savings for UK Icesave customers.  Yes, that’s not just £50,000 that’s the whole amount.  He said that the Icelandic compensation scheme had no money to meet its obligations and that he would step in and protect depositors.

This is fantastic news for all those with their retirement savings stuck in Icesave right now.

Darling said that he “wouldn’t normally do this” for the subsidiary of an overseas bank.  It really is every nation for itself at the moment.

“The Icelandic government, believe it or not, have told me yesterday they have no intention of honouring their obligations here,” said Mr Darling.

“Because this is a branch of a foreign bank the first call would be on the Icelandic compensation scheme which, as far as I can see, hasn’t got any money in it.

BBC, 8 October 2008

It seems to me that offering a guarantee without sufficient backing is tantamount to fraud and we should now be asking all guarantee schemes to tell us precisely what reserves they have.  Primer Minister Gordon Brown said the UK would take legal action against Iceland over its failure to guarantee compensation.

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5 responses to “UK to compensate all Icesave customers

  1. This is excellent news! I have saved substantially over the £50k ”safety net’ and have been feeling very gloomy about the balance.

    Need to find out more today but this is a very responsible reaction by Gordon & Alistair. Well done!

  2. Now we need to know how to keep the tax-free wrapper on many years’ accumulated cash ISA savings!

  3. This is excellent news and well done Mr Darling.
    While I have less than the £50,000 having removed over £100000 ten days ago it seemed to me that there was considerbale dubietey over wether or not the Icelandic government was in a position to honour the £16,300 that their compensation scheme provided for. I am much relieved.

  4. Matthew DOrman

    I am a saver with the Guernsey branch having placed my savings there as a means of generating income for my retirement and to augment my pension. I read with interest the recent States of Guernsey announcement that it would protect all islanders savings but there is no mention of savers which are no islanders.

    Although the UK government has stated that it guarantees all savers deposits with Icesave in the UK this does not cover depositors with offshore branches.

    When will the States of Guernsey government stand up and be counted and issue the same level of protection to the savers with Landsbanki who, due to The Icelandic government default on even partial guarantee, stand to lose all they have saved?

    I see nothing in the press regarding The States of Guernsey position and although I have contacted both the Financial services commission and the States of Guernsey I have heard nothing back from them.

    I would appreciate it if this was brought to the wider public attention and pressure is brought to bear on the States of Guernsey Government to repay some of the windfall they have received over the years from savers and banking institutions based in the country; failure to do so I believe will result in Guernsey as a safe banking state being lost for some time.

  5. As Matthew above points out, savers in Guernsey Landsbanki may well be high and dry. Anyone else affected by this can use the action site here as a springboard for information, links to other sites and forums where there is much info to be had.

    All may not be lost just yet in Guernsey. The pressure is on!

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