Page last updated at 19:17 GMT, Tuesday, 7 October 2008 20:17 UK

Icesave worries: Your questions

Paul Lewis from BBC Radio 4's Moneybox answers more questions

UK customers have around 4bn invested in the Icelandic bank Icesave. The authorities in the UK are preparing for the bank's parent in Iceland, Landsbanki, to be declared insolvent.

They have been warned they will probably have to claim their savings back through compensation schemes.

BBC News website readers have been sending in their questions to money expert Andrew Hagger from moneynet.co.uk.


I have tried to log on to Icesave's web site this morning and they are not allowing any transactions. Their phone number is constantly engaged. Have they gone bust despite the governments assurances? Of course I was hoping to move my money out before that happened.
Sue Welch, Stockport

ANDREW HAGGER: Icesave is part of Landsbanki which was taken under the control of the Icelandic regulator last night (6 Oct) and a statement from Landsbanki claimed it had been put into receivership but not been put into liquidation. We will have to wait and see what happens over the next couple of days; however the UK Financial Services Compensation Scheme (FSCS) has indicated that it would handle applications for compensation from UK savers rather than them having to deal directly with the Icelandic authorities.

Is my cash ISA deposit going to be safe with Icesave? If yes, is there any limit on amount of money protected?
Vikas Agrawal, Hounslow

ANDREW HAGGER: It is too early to say what the position is regarding the savings guarantee from the Icelandic viewpoint but hopefully this will become clearer in the next couple of days. Some sources are suggesting that if the Icelandic government was not able to meet its guarantee then the governments of Sweden, Norway and Denmark would back Iceland in an emergency.

A Cash ISA is treated in the same way as taxable savings balances, the overall limit on money protected per authorised institution per person is 50,000, however in the case of Icesave the first 20,000 Euros would be covered by the Icelandic protection fund and the remainder will be covered by the UK Financial Services Compensation Scheme (FSCS).

Icesave letterhead
UK customers have around 4bn invested in the Icelandic bank Icesave

My savings have built up over a number of tax years so am I likely to lose the ability to transfer it to another provider so losing the tax free interest potential?
Alex, Leeds, UK

ANDREW HAGGER: There has been no precedent set regarding this scenario, however if the UK government wants to encourage the millions of people who make use of their annual tax free allowance to continue their savings habit, then this is an area that will have to be addressed as a priority.

I'm an Icesave customer with 10k in an ISA - if that disappears, I won't have the cash to pay my income tax. Will the Icelandic government cough up for my fines!?
Ian Lockwood, Nottingham

ANDREW HAGGER: As much as I share your frustrations, I think that it's highly unlikely that you would be able to recover any additional costs as the financial compensation schemes relate purely to savings balances. It is still too early to say when the compensation clause will be triggered as Landsbanki the parent company of Icesave has not yet been placed into liquidation. Depending on the timescales involved it may be worth contacting your tax office and explaining the situation as I'm sure you won't be the only one in this position.

I have a savings account with Kaupthing. Are my savings safe?
David Sutton, Peterborough

ANDREW HAGGER: The Kaupthing website is currently open for business as usual. Kaupthing Edge is a UK bank and regulated by the Financial Services Authority (FSA). This means that if the bank did fail, the first 50,000 would be covered by the UK compensation scheme rather than the split Icelandic/UK arrangement with Icesave.

Why can't they sell off Icesave to another bank, I have 250,000 invested with them?
Julian Maine, Porthcawl, UK

ANDREW HAGGER: With the current global financial markets in turmoil it seems unlikely that this will happen. With regards your savings balances, you and some 300,000 others are in a similar position of being worried about the safety of your money. We are hoping for some further clarification for savers directly from Icesave and/or the UK government as to what course of action will be required to enable people to access their money. The compensation guarantee from the UK FSCS doesn't come into play until Landesbanki is officially placed into liquidation.

I have read that the Icelandic government have guaranteed all deposits held in their national banks. However, I have also heard that this is only true if the person that holds the bank account is an Icelandic national. For British nationals the protection is limited to 15,000 in Iceland and then an additional 35,000 through the UK compensation scheme. Is this correct?
Mike Atkinson, UK

ANDREW HAGGER: Hi Mike - yes you are correct in that for UK savers with money in an Icesave account the first 20,000 Euros (Approx 16,000) is covered by the Icelandic protection scheme and the remainder under the UK Financial Services Compensation Scheme. We understand that the FSCS will deal with the administration of claims under the Icelandic compensation scheme if Landesbanki the parent company of Icesave goes into liquidation.

I have 2,500 with Icesave, having opened the account a couple of months ago, attracted by their interest rates. I've always been careful to spread my money between banks. I'm particularly concerned as to how long it might take to get my money back as I'm midway through a house purchase and was going to use this money for that.
Cary, Leeds

ANDREW HAGGER: At this very early stage it is unclear what the process will be for claiming funds invested with Icesave. The first 20,000 Euros of all claims will be covered by the Icelandic protection fund. With a reported 300,000 UK savers having balances deposited with Icesave it is in the interests of the UK Government to liaise with the Icelandic Financial Supervisory Authority as a matter of urgency to provide clarity on the claims procedure for UK savers.




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