Who owns who?

Published:: 12 February 2009
Topic:: News,Money,Savings

Many savers are feeling unnerved. The collapse of the Icelandic banks and ongoing turmoil in the British banking sector has resulted in nervousness over whether or not the money individuals have with banks and building societies is safe.

Prior to the financial crisis, most savers wouldn't have thought twice about putting their money in a bank or building society account. But when giants such as Royal Bank of Scotland, Lloyds Group (the new bank formed following the merger of Lloyds TBS and HBOS), Northern Rock and Bradford & Bingley need rescuing by the Government, it's not surprising that some people are concerned about the safety of their money. But are these concerns justified or are savers worrying unnecessarily?

What protection do I have?

If you have your savings with a UK bank or building society it will be registered with the City regulator, the Financial Services Authority (FSA) - many overseas banks which offer products to British savers are also registered with the FSA but if you are unsure, check on the regulator's website (http://www.fsa.gov.uk/). If the firm is regulated, you, the customer, has protection in the unlikely event of that institution going bust.

You are protected by the Financial Services Compensation Scheme (FSCS) which guarantees the first £50,000 you have in savings (£100,000 for a joint account).

However, that protection applies per institution, not per account, so if you have more than £50,000 with any one bank or building society it is worth spreading your money around between different providers. And because some institutions operate a number of different brands, you also need to know whether all brands are registered separately with the FSA, or whether there is a single registration for the entire group. If it is the latter, you will only have £50,000 protection across all that institution's brands.

For example, HBOS offers savings accounts under the Halifax, Bank of Scotland, Birmingham Midshires and Intelligent Finance brands as well as providing savings accounts for The AA and Saga, but it has a single registration with the FSA. This means that if you have a savings account with Halifax, and another with Birmingham Midshires, only £50,000 is protected.

Similarly, before the rescue of B&B, savers with an account with B&B and an account with Abbey would have had £100,000 of protection. However, B&B's savings book has been sold to Santander, Abbey's parent company, and the two brands now have a single FSA registration meaning savers only have £50,000 protection in total.

Conversely, Royal Bank of Scotland and Natwest, which are both part of the same group, are registered separately with the FSA so you could have a savings account with both, giving you £100,000 of protection. This is also the case with Lloyds TSB and HBOS customers following the recent merger of the two banks as both have retained their separate FSA registrations (although as mentioned above, savers with HBOS accounts have to be careful).

For more information on this, read our article, 'How to keep your savings safe'.

The rules are different for merged building societies, however. While banks can retain separate FSA registrations, building societies can't. That said, because of the financial instability and the fact that we have seen so many building societies merge, temporary rules are currently in place which run until December 30 2010.

The FSA will allow a merged building society to keep separate compensation limits for customers who already had accounts with both societies before a merger. New savers who have opened an account after the merger only receive a single compensation allowance. For example, Skipton and Scarborough building societies merged on April 1 this year. Any saver who had accounts with both societies prior to that date will have £100,000 protected under the FSCS (£200,000 if the accounts are in joint names). However, the total protection for accounts opened since April 1 2009 is just £50,000.

Do any institutions offer total protection?

Yes. Your money is totally secure if you invest with National Savings & Investments or Northern Rock because they are backed by the Government. However, this protection comes at a cost as their accounts are not paying the best rates. If you want to maximise returns therefore, and have more than £50,000 in savings, it's worth spreading your money between different institutions.

Also, a number of Irish Banks operate in the UK Savings market - Anglo Irish and Bank of Ireland (which provides the Post Office's savings accounts). Savings held with these institutions are protected by the Irish compensation scheme and the Irish Government has said all retail savings will be fully protected until September 2010.

How can I spread my money around safely?

You need to know which institutions own which. Here we give a run down of the major savings providers so you can spread your money around and ensure that all of your savings are totally protected:

Provider	Parent company & country of origin	Maximum level of protection
Alliance & Leicester	Banco Santander, Spain	£50,000
Abbey ASDA Bradford & Bingley Cahoot	Banco Santander, Spain	£50,000 (in total)
Akbank¹	Akbank N.V, Netherlands¹	Netherlands Depositors' Compensation Scheme covers up to €100,000 (about £91,000)
Anglo Irish Bank	Anglo Irish Bank plc, Ireland	All deposits guaranteed by the Irish Government until September 28, 2010
Bank of Cyprus UK	Bank of Cyprus, Cyprus	Central Bank of Cyprus Deposit Protection Scheme covers up to €100,000 (about £91,000)
Bank of Scotland The AA Birmingham Midshires Halifax Intelligent Finance Saga	Lloyds Banking Group, UK	£50,000 (in total)
Bank of Ireland Post Office Bristol & West	Bank of Ireland, Ireland	All deposits guaranteed by the Irish Government until September 28, 2010
Barclays Woolwich	Barclays Bank plc, UK	£50,000 (in total)
Barnsley Building Society ⁴	Barnsley Building Society, UK ⁴	£50,000 ⁴
Britannia Building Society ⁴	The Co-operative Financial Services, UK⁴	£50,000 ⁴
Capital One	Capital One Bank (Europe) plc, UK	£50,000
Cater Allen Private Bank	Banco Santander, Spain	£50,000
Chelsea Building Society	Chelsea Building Society, UK	£50,000
Cheshire Building Society⁴	Nationwide Building Society, UK ⁴	£50,000 ⁴
Citibank	Citigroup Inc. USA	£50,000
Close Brothers	Close Brothers Group plc, UK	£50,000
Clydesdale Bank Yorkshire Bank	National Bank Group, Australia	£50,000 (in total)
Coventry Building Society	Coventry Building Society, UK	£50,000
Derbyshire Building Society ⁴	Nationwide Building Society, UK⁴	£50,000 ⁴
Dunfermline Building Society ⁴	Nationwide Building Society, UK⁴	£50,000 ⁴
Egg	Citigroup Inc. USA	£50,000
FirstSave Bank of Nigeria	Bank of Nigeria, Nigeria	£50,000
HSBC First Direct	HSBC Bank plc, UK	£50,000 (in total)
Icesave	In administration	Icelandic Compensation Scheme covers up to €20,887 (about £18,000) - remainder to be claimed under FSCS up to £50,000
ICICI Bank	ICICI Bank Limited, India	£50,000
ING Direct Kaupthing Edge ² Heritable Bank²	ING Direct N.V, Netherlands	Netherlands Depositors' Compensation Scheme covers up to €100,000 (about £91,000) ² ING Direct has taken over Kaupthing Edge & Heritable Bank's online deposit accounts
Investec Private Bank	Investec Bank plc, UK	£50,000
Julian Hodge Bank	Julian Hodge Bank	£50,000
Kent Reliance Building Society	Kent Reliance Building Society, UK	£50,000
Laiki Bank	Marfin Popular Bank (Cyprus)	Central Bank of Cyprus Deposit Protection Scheme covers up to €100,000 (about £91,000)
Lloyds TSB Cheltenham & Gloucester	Lloyds Banking Group, UK	£50,000 (in total)
Manchester Building Society	Manchester Building Society, UK	£50,000
Mansfield Building Society	Mansfield Building Society, UK	£50,000
Market Harborough Building Society	Market Harborough Building Society, UK	£50,000
Marks & Spencer Money	Marks & Spencer Financial Services Plc & HSBC, UK	£50,000
National Savings & Investments	Bank of England/HM Treasury	All deposits backed by UK Government
NatWest	Royal Bank of Scotland plc, UK	£50,000
Nationwide⁴	Nationwide Building Society, UK ⁴	£50,000 ⁴
Newcastle Building Society	Newcastle Building Society, UK	£50,000
Northern Rock	Bank of England/HM Treasury	All deposits backed by UK Government
Norwich & Peterborough Building Society	Norwich & Peterborough Building Society, UK	£50,000
Principality Building Society	Principality Building Society, UK	£50,000
Progressive Building Society	Progressive Building Society, UK	£50,000
Rothschild Reserve	N M Rothschild & Sons Limited, UK	£50,000
Royal Bank of Scotland Direct Line	Royal Bank of Scotland plc, UK	£50,000 (in total)
Saffron Building Society	Saffron Building Society, UK	£50,000
Sainsbury's Bank	Sainsbury's Bank plc & HBOS, UK	£50,000
Scarborough Building Society⁴	Scarborough Building Society, UK ⁴	£50,000⁴
Scottish Widows	Lloyds Banking Group, UK	£50,000
Secure Trust Bank	Arbuthnot Banking Group plc, UK	£50,000
Shepshed Building Society	Shepshed Building Society, UK	£50,000
Skipton Building Society⁴	Skipton Building Society, UK⁴	£50,000⁴
Standard Life Bank	Standard Life Bank plc, UK	£50,000
Stroud & Swindon Building Society	Stroud & Swindon Building Society, UK	£50,000
State Bank of India	State Bank of India, India	£50,000
The Co-operative Bank ⁴Smile	The Co-operative Financial Services, UK⁴	£50,000 (in total)⁴
Teachers Building Society	Teachers Building Society, UK	£50,000
Tesco Personal Finance	Tesco plc, UK	£50,000
Turkish Bank (UK) Ltd.	Turkish Bank Limited, Turkey	£50,000
United Trust Bank	United Trust Bank, UK	£50,000
Virgin Money ³	Virgin Group, UK³	£50,000 ³
West Bromwich Building Society	West Bromwich Building Society, UK	£50,000
Yorkshire Building Society ⁴	Yorkshire Building Society ⁴, UK	£50,000⁴
Whiteaway Laidlaw Bank	Manchester Building Society, UK	£50,000

¹ Akbank N. V. is a wholly owned subsidiary of Akbank T.A.S, Turkey.
² ING Direct has taken over Kaupthing Edge & Heritable Bank's online deposit accounts.
³ Deposits managed by Royal Bank of Scotland under its FSA registration.
⁴ Cheshire Building Society, Derbyshire Building Society and Dunfermline Building Society are trading divisions of Nationwide Building Society. Barnsley Building Society is a trading name of Yorkshire Building Society. Skipton and Scarborough building societies merged on March 30, 2009. Britannia Building Society is a trading name used by The Co-operative Bank plc.