'Protected' savings..

[Merritt]

I hadn't really looked in to this at all but I see from THIS link that the £50,000 protection isn't as I thought..

--- Snip ---

Then, since 7 October 2008, that threshold has been raised so each saver's first £50,000 per bank is fully protected.

This only counts for a net deposit, so if you had £50,000 deposited but also had a £20,000 loan with the same bank, then only £30,000 would be compensated.

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Question is - would a 'net deposit' also cover a mortgage? I.e. if you had a mortgage with bank A and savings with bank A, would the 'net deposit' arrangement come in to affect?

Thanks

Steve

[Dave_ST220]

Would the loan be cleared then?

[Merritt]

Dave_ST220 said:

Would the loan be cleared then?

No but it would potentially wipe out any savings you have - hence my concern....


Steve

[LeoSayer]

Merritt said:

Question is - would a 'net deposit' also cover a mortgage? I.e. if you had a mortgage with bank A and savings with bank A, would the 'net deposit' arrangement come in to affect?

Yes. I have an offset mortgage, so all my savings are with same bank that holds my mortgage.

[Merritt]

LeoSayer said:

Merritt said:

Question is - would a 'net deposit' also cover a mortgage? I.e. if you had a mortgage with bank A and savings with bank A, would the 'net deposit' arrangement come in to affect?

Yes. I have an offset mortgage, so all my savings are with same bank that holds my mortgage.

Thats fine, but with a normal situation i.e. separate savings account and separate mortgage with the same bank, would the mortgage effectively reduce the £50k savings 'protection' that the government has put in place?

[LeoSayer]

Merritt said:

LeoSayer said:

Merritt said:

Question is - would a 'net deposit' also cover a mortgage? I.e. if you had a mortgage with bank A and savings with bank A, would the 'net deposit' arrangement come in to affect?

Yes. I have an offset mortgage, so all my savings are with same bank that holds my mortgage.

Thats fine, but with a normal situation i.e. separate savings account and separate mortgage with the same bank, would the mortgage effectively reduce the £50k savings 'protection' that the government has put in place?

It's the same regardless of the type of account. If a bank fails then your savings will be used to reduce the size of your mortgage debt, so your savings won't be paid back to you directly. I'm not sure if that only applies about with savings up to £50k or above that as well.

There is good info on this on the moneysavingexpert site.

[Merritt]

Thanks for the info.. If you are correct, I will be moving mine!

Cheers

Steve