The most important thing is to have your savings somewhere they are likely to be safe. C&G Savings is a division of Lloyds TSB Bank plc, which means your savings with C&G are actually savings with Lloyds TSB - and Lloyds TSB is financially strong.
Lloyds TSB, and therefore C&G Savings, has been relatively sheltered from the worst of the recent market turmoil as we are very well funded and have limited exposure to riskier lending business. Lloyds TSB has been assessed as the sixth safest bank in the world by Global Finance magazine (up from seventh in 2007). It's also currently the only retail bank in the UK to have the internationally recognised Moody's Aaa (triple A) rating, which is a measure of the bank's financial security, and has been voted "Britain's most trusted bank" in the Reader's Digest poll for the 8th year running.
We welcome the measures announced by the Government because they are intended to bring stability to the UK banking industry as a whole. This announcement can only be good for reassuring customers.
The Financial Services Compensation Scheme (FSCS) provides protection for deposits in the event that a bank cannot pay back what it owes. From 7 October 2008, this has covered 100% of the first £50,000 of deposits with authorised banks or building societies (previously £35,000). This limit applies to each customer regardless of number of accounts a customer has with the bank or whether the money is in a joint account. All our savings accounts (except C&G Channel Islands accounts) are covered in the same way by this protection including Cash ISAs and Fixed Rate Bonds.
Lloyds TSB Scotland plc, Scottish Widows Bank plc and Lloyds TSB Bank plc are each separately authorised, so deposits with each bank have a separate £50,000 of FSCS cover. Money held in a Lloyds TSB branch account in England or Wales, a C&G savings account (except C&G Channel Islands accounts), or an account opened on the internet will all be part of Lloyds TSB Bank plc authorisation with one amount of FSCS compensation cover.
While C&G Savings is a division of Lloyds TSB Bank plc, Cheltenham & Gloucester plc is a separate company - still part of the Lloyds TSB Group, but is the administrator of the mortgages the group sells under the C&G and Lloyds TSB brands and no longer offers savings accounts.
There are a number of ways in which you can maximise the protection offered. The cover offered by the FSCS is per person per each bank or building society which is authorised by the FSA. If you spread your money around, ensuring no more than £50,000 is deposited with any one bank or building society, you should bear in mind that some banks are part of the same group of companies which share a single authorisation and therefore the money you deposit in them is subject to £50,000 of cover in total. E.g. HSBC and First Direct are under a single licence.
The FSCS was set up under UK law and deals with claims against firms regulated by the UK’s Financial Servcies Authority. C&G Channel Islands is incorporated and has its principal place of business outside the UK – in Guernsey – and it is licensed by the Guernsey Financial Services Commission (under The Banking Supervision (Bailiwick of Guernsey) Law 1994 (as amended). The FSCS does not cover deposits outside the European Economic Area (EEA), or in the Channel Islands or Isle of Man. There is currently no equivalent scheme for UK savers with money in Channel Islands accounts.
You are covered for a total of £50,000 each, whether your savings are in joint or single accounts or both. So if you had £60,000 total in a joint account and £10,000 in an account in your name with the same provider, you’d each be covered individually for £30,000 in the joint account, which means that as an individual you’d still be able to claim for the £10,000 in the single account within the overall £50,000 limit.
If you have savings and a mortgage, a loan or other debts with the same provider, such as an outstanding balance on a credit card, this may affect the amount of savings you can claim under the FSCS. The amount you have in savings or other deposits may be used to reduce the amount you owe under your mortgage or your other debts.
The limit of £50,000 protection would apply for the estate.
The same rules apply for children as adults. They have separate compensation cover up to £50,000 for funds they hold with a bank or building society.
IceSave customers will now have all their deposits, even those above the £50,000 limit, reimbursed through the UK Financial Services Compensation Scheme (FSCS) regardless of whether the Icelandic compensation scheme is able to make the first 20,000 Euros of any repayment. Full details on the situation can be found on the FSCS website.
Our understanding is that IceSave accounts are currently frozen. If the money has not yet reached your C&G Savings account then it is likely to be a matter for the FSCS. Please refer to the FSCS website.
Protection of your savings with both companies continues separately under the Financial Services Compensation Scheme and will do so until the deal is finalised. The larger combined group will be a leader in the UK for current accounts, savings, mortgages, loans, cards and insurance. From this strong position we expect to be able to deliver great benefits for our customers including the security of being with the foremost bank in the country.
Following Santander's recent take-over of Alliance and Leicester they have announced that they will operate A&L and Abbey under separate FSA authorisation. It's not yet been decided whether the HBOS banks and Lloyds TSB banks would continue to operate under separate FSA authorisation. However, at least until the deal is finalised they will continue to be authorised separately and the FSCS will provide £50,000 of cover per person for Lloyds TSB/C&G savings and a further £50,000 for HBOS savings.
The Financial Services Authority has said that it plans to issue a consultation paper considering further changes to the scheme. However, it is not yet known what changes this may or may not result in, and the above sets out the current position of the scheme.
For more information you can contact the FSCS in the following ways:
Call: Customer Services Team on 020 7892 7300 or Fax on 020 7892 7301
Email: enquiries@fscs.org.uk (Please include your full name and address with any message you send).
Write: Financial Services Compensation Scheme
7th floor, Lloyds Chambers
Portsoken Street
London E1 8BN
Web: http://www.fscs.org.uk
C&G Savings is a division of Lloyds TSB Bank plc.
Lloyds TSB Bank plc is authorised and regulated by the Financial Services Authority (FSA). Our FSA register number is 119278. You can check the FSA's register by visiting their website or by contacting them on 0845 606 1234. Lloyds TSB Bank plc is registered in England and Wales No.2065. Registered Office: 25 Gresham Street, London, EC2V 7HN.
*We may monitor and/or record telephone calls in case there's a need to check that your instructions have been carried out correctly and to help improve our service quality.
