I heard on the grapevine that an ex-senior employee of the FSAcommented at a gathering last week that investors with money in Icesave would not be seeing their cash until February. I, having moved all my ISAs (i.e. my life savings) to the fab guaranteed interest rate ISAs offered by Icesave, in the last week of May 2008 was not impressed. What luck! Moneysavingexpert.com’s Martin had been singing the praises of Icesave and telling “moneysavers” (as he calls the readers) what the (low) risks were for months. I had done his money makeover: got the Halifax 0% interest credit card for a year, fixed my electricity rate, lowered my phone bill, switched my current account to Alliance & Leicester (now owned by Santander, one of the biggest banks in the world as they keep telling us in bold red writing for the last week – do they think that means anything after the carnage we’ve seen in the last month?… in fact doesn’t that just make them seem riskier?!) and. Where was I? Oh yes, I had moved three years worth of ISAs to Icesave. Only the sheer convenience of having my regular savings at hand in a Plussaver account attached to my Premier Direct Alliance and Leicester current account had stopped me from handing my life’s sweat and blood over to Icesave. Who’d have thought that the economy of Icelandic bank Icesave, infact Iceland as a whole, was not as solid as ice?
Thankfully I was in the U.S watching the Dow Jones nose dive when the collapse of Icesave was announced. And, having had enough of hearing about the beginning of the end of the world as we know it, I tuned out of the news for a few days on my return. So I didn’t find out about what had happened to Icesave until the British Government announced that it would be backing all British savers’ investments in the collapsed Icelandic bank and moving things forward to retrieve the funds as soon as possible. Of course, no doubt, this was helped heavily by the fact that a number of local councils had their cash stashed with Icesave, as did many charities. Which reminds me, can anyone tell me why a cat charity should have £50 million in savings? How many old cat loving spinsters did they have to knock off to build that stash?!
Anyway, harmony has been restored to my world (or savings at least) by the announcement on Friday 24th October that Icesave, the Icelandic Government (of bankrupt Iceland, which has been lent $2.5 billion by the IMF) and the British Government had reached agreement on the return of our dosh, and had promised to guarantee return upto £50,000. By 3 November investors will be hearing from the FSA (Financial Services Authority) or was it the Financial Services Compensation Scheme (FSCS) regarding return of retail depositors money. Hopefully it’ll be a quick process involving online application for the return of your savings. For those of you who are thinking “what happens if one doesn’t have internet access?”, well (1) you wouldn’t be reading this if you didn’t and as you are, really, stop worrying about everyone else and (2) Icesave was mainly dealing with internet applications from retail savers so everyone affectedprobably has access. Speedy payout is promised, but what that means is your guess as much as mine. Hopefully with the FSA and FSCS involved it means payout before February, but that rumour I heard is still bothering me. I’m losing tax free interest on my savings as you read this! Good news is that (somehow) it will be ensured that the ISA status of ISAs with Icesave is retained. Sounds like an administrative nightmare to me.
Totally unfair on me and many other ex-Iceland fans that ING purchased Landesbanki and no one wanted Icesave. That’s the last time I’ll be putting my money in a country that melts away at the sign of financial trouble, let alone global warming! I mean, imagine, we could have woken up one day to news that Iceland had melted. What was I thinking back in May 2008, whistling away in the financial bubble?!
For further information go to: icesave.co.uk and http://www.fscs.org.uk/
<special thanks to guest writer CityWannabe on CafeArjun.com>