Hi,

I only have £1000 in icesave mini cash ISA, it may sound small but it's a lot for me and I am very unclear how and when I can claim it back.

I understand I have to claim it directly to the Icelandic govt, but their is no English version on their website, can someone help here please?

Hi again

With the latest reply to Vaughan regarding the collapse of ICESSAVE, stating that if the Iceland bank cannot pay their part of the compensation due to bankruptcy, then the £16,300 will be lost is a disgrace, I am inclined to withdraw ALL my savings I have with other institutions and put it under the bed.

We have been encouraged to leave our money in the banks to avoid disaster and this is the thanks we get!.

Whilst I have dismissed putting my money under the bed as foolhardy in the past I am afraid that this latest item does nothing to encourage me to keep my money in banks in the present climate.

In addition the announcement was made first thing this morning about accounts being frozen and up to this evening savers have been given no clear announcement as to our position. Another disgrace.

regards Honeysuckle

Hi Graeme,

I see that the Telegraph have updated their article now and removed that quote from Clare.

They have also added a 3-and-a-bit minute radio interview with a UK reporter who had just spoken with the Icelandic Prime Minister about the situation. Here is the link.

Listen to what she says from the 3:00 minute mark onwards. The Icelandic Prime Minister has said that the foreign Landsbanki operations (including Icesave) are frozen because Landsbanki is going to be split, and Icesave and the other foreign operations are going to be separated from the domestic operations of Landsbanki!

My wife has in the past month transferred her Cash ISA from Halifax to IceSave since it was advertised in many places as the 'best buy' - typical!

My question is.... assuming she gets the money back, will she lose the ISA status for that money. i.e. will she have to start a new ISA and deposit her max annual allowance for several years until it is all back in an ISA or will the money be recognised as being ISA money and be able to be deposited directly into a new ISA back here in the UK?

Cheers.

I can confirm that Clare has been misquoted here and the Telegraph are in the process of updating their article.

You are right, Vaughan, the FSCS's role is purely to top-up the shortfall so the first €20,887 can only be claimed from Iceland.

Click here to read Kevin Mountford's article 'Banking chaos - advice for savers'

There are conflicting reports about what would happen if the Icelandic regulator was unable to meet its obligations, and cannot payout the first £16,300 on claims. This is being reported as a real possibility because Iceland (the country) is in danger of bankruptcy.

The Telegraph are quoting MoneySupermarket's own Clare Francis as saying that the UK FSCS will pay out the Icelandic regulator's obligation if necessary:

'Clare Francis, editor of the personal finance website moneysupermarket.com, said: "The good news for British customers is that even if the Icelandic scheme does not have enough money set aside, the rules mean that the British authorities will step in to cover all the shortfall."'

See second-last paragraph in this article (click here).

On the other hand, Sky News is reporting that the UK FSCS will NOT pay out the Icelandic regulator's obligation if Iceland goes bankrupt - see the bullet points under "Icelandic Banks: Deposit Insurance" in this article (click here).

To clarify the situation, at 16:37 today I called the FSCS (UK regulator) and spoke to someone called Garry. He confirmed that the UK FSCS will NOT pay out the Icelandic regulator's obligation if the Icelandic regulator is unable to do so. He explained that if the Icelandic regulator cannot honour its obligation, deposits of less than about £16,300 will be lost entirely, and deposits of between £16,300 and £50,000 will be paid out LESS the first £16,300.

Please let Clare Francis know that her quote in the Telegraph is completely wrong.

I like strapped for cash moved money out of my Icesave Easy Access!! accounts at 10.45pm last night and the account say that the transactions were "processed". So does this mean that I'll be credited with the money in the UK current account or is it held in the banking ether??

I know it's a very worrying time, but I've been following what's been going on during the past few months quite closely and there is no indication that anyone with less than £50k savings will lose anything. Indeed, if Icesave was going to go bust, it's been great timing because if Icesave had went down yesterday, you would have been protected to only £35k. (I did wonder if Icesave held back until the UK FSA guarantee kicked-in today)

There's going to be waiting and bureaucracy involved, but everywhere you look, all the money sites and experts say that Iceland and its top-up arrangement with the UK will assure you get your money back.

My sister and I had a similar problem with our mother when she became a demetia sufferer. The public guardianship office (now titled the office of the public guardian) are an excellent government run organisation linked to the court of protection. My mothers finances were very well looked after with them. I would recommend you contacted them as soon as possible! The interset my mother received on her capital was truly remarkable.

Im so upset and could lose £50k. If we didn't have the internet our savings would have stayed where they were and remained a lesser risk. However, no way did i feel there was an element of risk apart from the fact that i would have to change my view about banking i.e. online. Its now clear that my thoughts come back to me as Icesave appear to be protecting their own domestic customers and the serious uk savers are have been left without access. The Icelandic PM appeared to waffle his statement to protect uk money. I'm not sure about all these terms comming out, insolvency? Nationalised and within 1 hour recievership? I cant believe the FSA don't give FAQ of what the procedure is to claim savings? I'm still waiting for a return call! This is all so confusing and frustrating, i just feel like crying.

I guess what's worrying most folk is the time to process claims. Icesave's website used to give assurances that it would all be done within 3 months if anything went wrong. But it's unprecedented, and there's nothing to comapre it with. With hundreds of thousands of claims, those needing quick access are going to struggle whilst waiting.

I had accounts with HBOS, Bradford & Bingley and Icesave (I sure know how to pick them). What's becoming apparent to me is now to have several current accounts with "stable" banks and building societies to spread the risk, and make sure that I can make transfers quickly. I wanted to transfer from Icesave's Cash ISAs to another bank's ISAs, but the time to open an account and make the move would have taken weeks, hence I ended up withdrawing to my HBOS current account.

The Icelandic government has put Landsbanki (the Icelandic registered bank) into receivership. In the UK, Landsbanki has a branch, and the branch trades under the name 'Icesave'. A branch and its head office are the same legal entity so a receivership of the head office affects the branch too (it's different where a branch has a legally separate subsidiary company). The receivership is a legal process in Iceland (but UK savers should still have rights in that process).

A receivership is different from an insolvency because it doesn't automatically mean that the bank will close down for good (though it doesn't exclude it either). The main purpose of a receivership is to give the company legal protection from its creditors and in this case, to allow the Icelandic government to take full control of the bank.

In the UK, European banks have to choose one of two options to protect savers - opt for full coverage under the UK compensation scheme (FSCS) or ask creditors to claim the first slice (20,887 euros) under (in this case) the Icelandic scheme and the next slice (up to £50,000) under the UK FSCS. Landsbanki opted for the Iceland / UK FSCS model, hence the 'two claims'. A lot of people are saying that because of the current crisis, the Icelandic scheme may not be able to pay out. However, there are some articles saying that in that case either the other Scandanavian governments have an obligation to step in and support the Icelandic goverment, or the FSCS will pay out.

Unfortunately, the Icelandic government has said that its government guarantees will not apply to the large number of UK and Dutch savers who have Icesave accounts. However it has said that it expects Landsbanki to have enough money to honour its UK and Dutch deposits. The UK Financial Services Authority has already said to hold tight and wait for more news. Given the large number of estimated UK savers, some papers are already speculating that the FSA may try and streamline any claim process so that people only have to lodge one claim with the UK FSA and not two (one in Iceland, one in the UK).

I am overseas (on my honeymoon!) and couldn't withdraw my money last week as I wanted because I didn't have the account details with me. I called Icesave today and had little trouble getting through (two tries to get in the queue), and only a 5 minute wait on hold before speaking to an operator. She was able to confirm my account balance (just under £40k) and seemed pretty calm and friendly.

There are a lot of rumours swirling on the wind right now about what will happen next. The bottom line seems to be that our money is stuck for now and it's not completely clear whether Landsbanki has shut its doors for good. If it has, it might be a couple of months before we can extract our money again, but our chances of getting the money back (up to £50,000) look ok and we are very lucky (relatively speaking!) that this all happened after the government increased the savings protection from £35,000 to £50,000.

My question is in the same vein as strappedforcash.

I withdrew everything from my Icesave Cash ISAs on Saturday and the account was automatically closed (and a good job I took screen printouts to prove what I had). It takes 4 working days to clear, and as processing began on Monday, it should be clear on Thursday.

But what is the banking process for this? Can Icesave halt or "pull back" the withdrawal a day after it's begun? Or is it in the banking system's "electronic ether" and will eventually come through?

To quote Tom Petty & The Heartbreakers, "The waiting is the hardest part..."

Just to keep everyone updated, the FSCS page has been updated with the following statement:

FSCS gears up to assist Icesave's UK branch customers

"In the light of the current uncertainties, the Financial Services Compensation Scheme (FSCS) is today gearing up in case it needs to assist approximately 300,000 savers at Icesave.

Icesave is the UK branch of Landsbanki Islands hf (trading here under the registered name Icesave). It is an EEA bank that is authorised by the Fjármálaeftirlitið (FME), the financial services regulator in Iceland. The Financial Services Authority in the UK has reported that Icesave is now expected to go into insolvency proceedings in Iceland and this would trigger an FSCS default.

Eligible savers with Icesave are protected by the Icelandic Depositors' and Investors' Guarantee Fund (IDIGF), up to a limit of the first 20,887 euros of their deposits. As an Icelandic bank Icesave is not automatically a member of the FSCS, but it opted to become a 'top-up' member. This means that eligible retail savers with Icesave's UK branch whose savings exceed the Icelandic limit would benefit from top-up compensation from the FSCS covering the amount over the Icelandic limit up to the new FSCS compensation limit for deposits of £50,000.

If the default is triggered as expected, FSCS will contact all UK savers directly with details of how to apply for compensation. Further announcements will follow and we will keep this page updated."

Source: http://www.fscs.org.uk/consumer/

You can also click here to read Kevin Mountford's latest article, 'Banking chaos - advice for savers'

What happens when you have a Fixed Int account maturing next year? Does the compensation cover interest accrued or just the capital sum invested?