The Lemon Fool

Hi,

A question about the £85k FSCS guarantee.

I've heard different people tell me different things. Is it a "maximum payout" from the government in case of failure, or is it the amount that they will bail you out?

Example, let's say I've got £150k in a cash ISA.

Let's say the bank go under. And after the wind down, they can only pay out 50%. So they can pay out £75k, and I've got a loss of £75k.

Do I end up getting another £75k from FSCS to make up my loss. Or do I get £10k from the FSCS to make me upto £85k.

On a practical level, I actually have £90k in a challenger bank, and it will cost me 6 months interest to remove any cash. So it would cost me around £50 to drop it below £85k. Any opinions if I should just bite the bullet and do it?

Thanks,
Paul

paulnumbers wrote:Example, let's say I've got £150k in a cash ISA.

Let's say the bank go under. And after the wind down, they can only pay out 50%. So they can pay out £75k, and I've got a loss of £75k.

Do I end up getting another £75k from FSCS to make up my loss. Or do I get £10k from the FSCS to make me upto £85k.

The latter, except that you don't have to wait for the wind down, the FSCS will pay you the £85K immediately (7 days). See https://www.fscs.org.uk/what-we-cover/b ... societies/ and the links within it.

mc2fool wrote:

paulnumbers wrote:Example, let's say I've got £150k in a cash ISA.

Let's say the bank go under. And after the wind down, they can only pay out 50%. So they can pay out £75k, and I've got a loss of £75k.

Do I end up getting another £75k from FSCS to make up my loss. Or do I get £10k from the FSCS to make me upto £85k.

The latter, except that you don't have to wait for the wind down, the FSCS will pay you the £85K immediately (7 days). See https://www.fscs.org.uk/what-we-cover/b ... societies/ and the links within it.

thanks.