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.

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.

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.

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.

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??

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 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'

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Cheers,
Graeme Delap, Community Editor,
graeme.delap@moneysupermarket.com

Vote for your Community Star: Community Stars 2009

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.

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!

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,

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?

Dear Honeysuckle,

No, no! That's not what I said - you've got it wrong. If Landsbanki goes into insolvency and Icebank along with it, then the Icelandic regulator (equivalent of the UK's FSCS) guarantees the first £16,300 of each person's deposits. Then, if the Icelandic regulator can't meet the obligations, the Icelandic government steps in and pays out on the guarantees. Then, if the country of Iceland can't meet this obligation (because the government of Iceland goes bankrupt, and this is being considered in the press as at least a possibility), then the governments of Norway, Sweden and Denmark have a joint arrangement where they will help out.

The only possibility of a problem in this sense is if Iceland (the country's government) goes bankrupt, and the other Nordic countries do not keep their promises to step in.

This Guardian article repeats exactly what I say in my posts above about the compensation.

This Times article gives a good explanation of what the current situation is and what would happen in all the different possible scenarios.

To those people who are wondering about how to claim, we will all be contacted by the FSCS if and when a claim is necessary. You need to read this post from Graeme, which quotes the FSCS website.

Ah but nobody has answered my earlier question:

What about any accrued interest on Fixed Interest accounts even up till today never mind interest lost while we wait for our money?

I find in incredible that no one from the British Government,ie Brown or Darling, can be bothered to tell 300,000 British investors about the current situation and any additional help that may be forthcoming. It would seem Iceland is very involved with our high street and other areas. Surley, they have some interest to make sure that more British companies do not have the same problems as the banks. I stand to loose a lot of money from this fiasco. The British Government has done nothing! God I'm glad I live in a marginal seat! I know where my vote will go next time if I survive the stress! By the way, it might be an idea to remove Iceland's banks from this site. Surely you cannot still be touting for business for them. Love to know how much you have made from pushing these sites!