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Page last updated at 01:47 GMT, Tuesday, 21 April 2009 02:47 UK

Despair over bank's lost savings

By Chloe Axford
BBC News, Guernsey

Landsbanki saver
'Joyce' lost 48,000 when the bank collapsed

More than 1,500 people lost their savings when Landsbanki Guernsey went into administration in October, leaving some of them facing an uncertain future.

Joyce (not her real name) is aged 80 and virtually blind through macular degeneration.

The loss of £48,000 in the Landsbanki collapse, money saved-up by her late husband, left her "devastated".

"The loss of savings means I will never be able to afford an operation to regain my sight," she said.

"Also when I eventually have to go into a nursing home I will have no money to pay for the care that I need."

My husband worked hard all his life, he presumed his savings would be safe
'Joyce', Landsbanki Guernsey saver

Now, six months after Landsbanki Guernsey, a subsidiary of Landsbanki Islands HF in Iceland, went under, the lorry driver's widow from Northumberland says she feels equally let down at the lack of help from the UK and Guernsey governments.

While savers with collapsed UK banks are entitled to up to £50,000 in government compensation, savers with non-UK banks, like those based in the Channel Islands, are not.

A Treasury spokesman said: "It is a terrible situation and a very human situation but the government does not compensate losses in jurisdictions outside the direct control of the UK."

Joyce said: "I am devastated that the government took this attitude against us working class British savers.

"My husband worked hard all his life, well into his 70s.

"He saved with the Cheshire Building Society who advised him to transfer the money to its Guernsey branch as it paid a higher rate of interest.

"He still paid UK tax on the interest.

"When Cheshire Guernsey was taken over by Landsbanki he presumed his savings would be safe."

'Emotional despair'

Guernsey recently introduced its own compensation scheme but Landsbanki's depositors will not be covered by it because the bank failed before it was created.

In his latest statement, Deputy Lyndon Trott, Guernsey's Chief Minister, said: "We continue to work closely, through regular contact with the UK Treasury, to support the work of the joint administrators of Landsbanki Guernsey in maximising the level of returns to depositors."

So far depositors have received 30% of their savings back from the administrators Deloitte and Touche, but are actively campaigning for the return of the remaining 70%.

Neil Dickens, from the Landsbanki Guernsey Depositors Action Group, said many of its, mainly elderly, members were now in a place of "emotional despair".

The group's website is filled with stories of people struggling to get by without the money they had saved to see them through retirement.

Most of them, like Joyce, prefer to remain anonymous, coming from a generation where financial matters are kept private.

Deloitte and Touche said it planned to recommend a second "interim" payment was made to depositors but made no indication when that would be or how much it would amount to.

Getting proper compensation, said Joyce, would make a big difference: "It would give me a better quality of life knowing that I could pay for what I need instead of having to rely on the good nature of friends."



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