Ask the experts - answers now online

Last week we wrote to our clients giving them the chance to put their queries to our panel of experts - Peter Hargreaves, Chief Executive, Mark Dampier, Head of Research, and Tom McPhail, Head of Pensions Research.

We have distilled the responses and published replies to the most prevalent concerns below. We have divided them into five categories – Safety of Cash, Safety of Investments, Pensions, Investments & Savings and Markets & Economic Outlook. Each section can be accessed using the tabs below. Responses correct as at 13/10/08.

Could you please clarify what are the safeguards on UK bank deposits? I have one account in joint names with my wife - is that covered for £50,000 or £100,000? I have another account in my sole name with the same bank - is that covered for £50,000 also?
If you have £100,000 in a joint account then it is protected in full as you and the joint holder both have a £50,000 allowance. However, you would receive no further protection for any accounts held with that bank in your own name. There is just one £50,000 allowance per bank. It is also worth mentioning that the £50,000 allowance is for each bank that has its own independent licence with the FSA. Some banks (e.g. Halifax and Bank of Scotland have combined licences so you only get one £50,000 allowance).
I hold a large cash balance within my Vantage SIPP. Can you please tell me which financial organisations are holding the actual cash balances? Is this cash covered by the Financial Services Compensation Scheme
Client money held within the Vantage Service is spread across a number of banks. Our policy is continually reviewed and the primary consideration is always security. Except where clients have chosen specific fixed rate deals, client money within the Vantage Service is spread between the most secure banks in the UK.

On 8 October the British Government announced a support package which effectively provides three guarantees to UK savers.

There is an implicit guarantee that the government will always support bank deposits, confirmed by actions taken for private individuals who held Icelandic bank accounts.
The Financial Services Compensation Scheme (FSCS) provides that each individual is entitled to up to £50,000 in total in compensation for losses across all their deposits with that institution. Our current policy, which spreads cash between a number of different institutions, means that our clients should receive this level of protection with each of the banks we use.
The Government has made funds available to guarantee the wholesale funding of eight banks and building societies - Abbey, Barclays, HBOS, HSBC, Lloyds TSB, Nationwide, Royal Bank of Scotland and Standard Chartered - which should ensure these banks can sustain their operations going forward.

We currently believe these eight banks offer the highest level of security and we shall not go outside these institutions for money held within Vantage (this answer was updated on 7 November).
I have £40K in your High Interest Cash Option deposited with the Bank of Scotland. How secure is my money?
Subsequent to the new £50,000 limit your money is covered by the Financial Services Compensation Scheme. Obviously if you have other monies within the HBOS Group and these are over £50,000 you are not covered under the Financial Services Compensation Scheme but we still think it unlikely that the government would allow any of the five major clearing banks to become insolvent.
Should I think about moving my savings to Irish Banks in view of the guarantee now offered by the Irish Government?
Irish banks would appear to not only have guaranteed deposits in their Irish branches, but also in their British subsidiaries. We are looking at this situation because it might be a suitable home for part of the cash that we hold on behalf of clients.
I have cash in a Spanish bank from a property I recently sold over there. Would I be wise to leave it or repatriate to the UK?
We are not experts at Spanish banking regulation. Santander claim to be an extremely sound financial organisation. Indeed they own Abbey National (now renamed Abbey) and are acquiring the branches of the Bradford & Bingley. However you have to remember that huge numbers of Spanish banks are heavily exposed to the Spanish property market which is falling in value more than our own. We do not know how much this will affect Spanish banks. You are also exposed to the euro which could give you a currency profit or loss.