How do people manage the FSCS £85,000 limit

[raybarrow]

Hi Folks,
In view of my age I am quite 'cash' rich (I have investments as well). Given the £85,000 FSCS limit for finacial institutions, I have several bank/savings and stay roughly within that limit. With ISAs I have tended to consolidate them into one ISA. In practice it is the easiest option, but not the best for the interest rate.
Do people get an ISA with a new institution when the value of the current ISA is around the £85,000 (allowing for future interest payments) and accept a lower interest rate, or keep it in the best rate ISA and keep their fingers crossed.
The likeyhood of another Northern Rock is, I suspect, quite low but you never know.

If I was truly worried I'd go for the no limit National Savings (but historically rates have been all over the place). The other thought was that with mutliple accounts etc if I suddenly pop my clogs, it leaves a 'challenge' for those who have to deal with it. If I have notice of my demise (I not planning to go anytime soon) I would have the chance to move stuff about and leave it all more tidily.

I'm not being morbid but having an 'almost relative' die and leave a bit of a mess, including a will which itself caused a problem, it would be nice to think that I had at least considered the situation.

What do others do?
Ray.

[Spet0789]

What are you more worried about? The hassle or a bank going bust out of the blue?

Unless you’ve got millions, I would suggest the following.

Use your premium bond allocation.
Stick to larger banks, even if that means foregoing a few pounds in interest.
Don’t worry about sticking strictly to the FSCS limit - having sat £100k in each of the large banks is not exposing you to any material risk.

Banks are much much safer than they used to be, especially for depositors. Compared with 2008 a U.K. bank would have to suffer percentage losses on its assets around 10 times higher before depositors are at any risk. The country would probably be in the middle of a revolution by that point.

[wanderer]

Using one of the "single login" savings options can help with the admin on non-Isa accounts. (Hargreaves Lansdown call it "Active Savings" but there are similar options from AJ Bell, Institutional Investor and some others). These let you have multiple savings accounts, each with the 85k protected with each institution, but all under a single log in and single dashboard. The rates are generally very nearly as good as you can get anywhere.

Those accounts are not nearly so good for ISAs. If you are worried about a bank going bump then it seems you have little option but to spread the accounts around. Personally, I have adopted the same approach as another poster on here and just gone for a couple of accounts, over the limit, but with the type of High Street names where you just know the government would have to step in. Indeed, I think the government still owns half of Nat West - I think its unlikely it will be allowed to go under!

I think the government will always bail out big retail banks, for fear of creating an almighty riot and run on the system. The 85k limit might be more concerning if it was a foreign owned bank with a funny name and you had invested outside of the herd.

[raybarrow]

Hi Folks,

What are you more worried about? The hassle or a bank going bust out of the blue?

Neither really and if I 'suddenly' pop my clogs nothing really matters too me (Whew! nearly went into Bohemian Rhapsody then). I reckon if I had a week, on-line, I could transfer the majority of my accounts etc into a National Savings a/c, which I already have, and leave a relatively simple estate to deal with. That's just the carer in me.

After Northern Rock, I too am of the opion that Gov UK wouldn't let it happen again unless everything collapsed, in which case we'd have more to worry about than the £85K limits and some ISAs.

No it's Satruday afternoon curiosity mixed with that 'almost a relative' leaving a mess, in which I was not involved, thankfully.
Mrs B is well aware of where the finances are and how to get at them (she has her own set of accounts/ISAs/investments). Although she would rather the money was 'in a box under the bed' she appreciates, that with inflation, that is like taking a £10 out of the box every so often and burning it.

Using one of the "single login" savings options can help with the admin on non-Isa accounts. (Hargreaves Lansdown call it "Active Savings" but there are similar options from AJ Bell, Institutional Investor and some others). These let you have multiple savings accounts, each with the 85k protected with each institution, but all under a single log in and single dashboard.

I wasn't aware of that. Interesting idea.

Cheers,
Ray.

[Loup321]

I have a Word Document with all my account details on it (login id, names and account numbers for all accounts, hints to passwords). I keep this up to date. For any major changes in who I bank with, I print out a copy and put it with my Will. I don't bother printing it just for changes of accounts I hold with the same provider - with my login id number and a death certificate, I would hope that any bank would tell my executors what they need to know.

I'm a rate tart, so currently have six providers for various accounts (including credit card).

[scrumpyjack]

Stick to mainstream reliable institutions and ignore it.

[AF62]

I have a Word Document with all my account details on it (login id, names and account numbers for all accounts, hints to passwords). I keep this up to date. For any major changes in who I bank with, I print out a copy and put it with my Will. I don't bother printing it just for changes of accounts I hold with the same provider - with my login id number and a death certificate, I would hope that any bank would tell my executors what they need to know.

A list of institutions and accounts is a good idea, but the logins and passwords…

Your executors certainly could possibly use the login and passwords you left with your will, but with the increased use of 2FA they probably can’t unless they have access to the second method of security.

But if they did then they would certainly be breaching the bank rules and possibly the law.

[stevensfo]

I have a Word Document with all my account details on it (login id, names and account numbers for all accounts, hints to passwords). I keep this up to date. For any major changes in who I bank with, I print out a copy and put it with my Will. I don't bother printing it just for changes of accounts I hold with the same provider - with my login id number and a death certificate, I would hope that any bank would tell my executors what they need to know.

A list of institutions and accounts is a good idea, but the logins and passwords…

Your executors certainly could possibly use the login and passwords you left with your will, but with the increased use of 2FA they probably can’t unless they have access to the second method of security.

But if they did then they would certainly be breaching the bank rules and possibly the law.

I don't understand the problem.

I use pretty much the same method as Loup321.

But in reality, I would hope that my executors would stick to registered letters and refuse to accept anything unless it was in writing.

In fact, I use this system today and it works just fine.


Steve

[gryffron]

I don’t think logins and passwords would be any use. Certainly, I wasn’t asked for any during a recent executorship.

Executors shouldn’t access the money without going through the banks’ probate procedures. Which all require paper certificates. So logins are unlikely to be of any help, unless they want to do something which is at the very least dodgy, certainly a breach of bank rules, and quite possibly illegal.

And of course, there’s always the possibility your document will fall into the wrong hands. Writing down your passwords could also nullify bank fraud guarantees.

Gryff

[raybarrow]

Hi Folks,

I have a Word Document with all my account details on it (login id, names and account numbers for all accounts, hints to passwords). I keep this up to date. For any major changes in who I bank with, I print out a copy and put it with my Will. I don't bother printing it just for changes of accounts I hold with the same provider - with my login id number and a death certificate, I would hope that any bank would tell my executors what they need to know.

I'm a rate tart, so currently have six providers for various accounts (including credit card).

I too am a rate tart so have multiple accounts. I'm a spreadsheet lover so all the details of where the money is, share are on that.
I like the idea of putting a basic copy of the institution details in with will. Makes it easier to find in what could be a stressful time, rather than "Now where did I put that spreadsheet thingy?". Passwords and all that are in Keepass and Mrs B has a copy.

Seeing the doctor this morning to discuss the results of my tests which to my untrained eye look ok. So if I can avoid getting run over I should be good for a few more years.
Ray.

[Lootman]

I don’t think logins and passwords would be any use. Certainly, I wasn’t asked for any during a recent executorship.

Executors shouldn’t access the money without going through the banks’ probate procedures. Which all require paper certificates. So logins are unlikely to be of any help, unless they want to do something which is at the very least dodgy, certainly a breach of bank rules, and quite possibly illegal.

I do not see what would be illegal about an executor accessing and withdrawing funds from the account of a deceased person at all. That power derives from the will and not from probate. But a non-executor should not do that.

[AF62]

I don’t think logins and passwords would be any use. Certainly, I wasn’t asked for any during a recent executorship.

Executors shouldn’t access the money without going through the banks’ probate procedures. Which all require paper certificates. So logins are unlikely to be of any help, unless they want to do something which is at the very least dodgy, certainly a breach of bank rules, and quite possibly illegal.

I do not see what would be illegal about an executor accessing and withdrawing funds from the account of a deceased person at all. That power derives from the will and not from probate.

These lawyers don’t think it is legal, so probably best taking legal advice before doing so -

https://www.thegazette.co.uk/all-notices/content/103884
https://www.murraybeith.co.uk/new/execu ... -away.html

[Lootman]

I don’t think logins and passwords would be any use. Certainly, I wasn’t asked for any during a recent executorship.

Executors shouldn’t access the money without going through the banks’ probate procedures. Which all require paper certificates. So logins are unlikely to be of any help, unless they want to do something which is at the very least dodgy, certainly a breach of bank rules, and quite possibly illegal.

I do not see what would be illegal about an executor accessing and withdrawing funds from the account of a deceased person at all. That power derives from the will and not from probate.

These lawyers don’t think it is legal, so probably best taking legal advice before doing so . .

As long as the executor is acting honestly and in good faith, then I do not see why there would be any problem. From the point of death an executor has the legal authority to collect assets. In some cases that requires a grant of probate, of course. But where an asset can be acquired without probate being completed, then that can happen. After all, that happens with personal effects, cash etc.

And if an executor can collect all the assets in that manner, then there might be no need for probate at all. But of course as always an executor can be held personally liable for any debts of the estate. I paid off all such debts first with such monies to avoid that risk.

[AF62]

I don’t think logins and passwords would be any use. Certainly, I wasn’t asked for any during a recent executorship.

Executors shouldn’t access the money without going through the banks’ probate procedures. Which all require paper certificates. So logins are unlikely to be of any help, unless they want to do something which is at the very least dodgy, certainly a breach of bank rules, and quite possibly illegal.

I do not see what would be illegal about an executor accessing and withdrawing funds from the account of a deceased person at all. That power derives from the will and not from probate.

These lawyers don’t think it is legal, so probably best taking legal advice before doing so . .

As long as the executor is acting honestly and in good faith, then I do not see why there would be any problem.

Didn’t the ‘honesty’ and ‘good faith’ evaporate when they didn’t tell the bank the account holder was deceased (and when the accounts would be frozen) and then used the dead person’s details to pretend to be them.

[Lootman]

I don’t think logins and passwords would be any use. Certainly, I wasn’t asked for any during a recent executorship.

Executors shouldn’t access the money without going through the banks’ probate procedures. Which all require paper certificates. So logins are unlikely to be of any help, unless they want to do something which is at the very least dodgy, certainly a breach of bank rules, and quite possibly illegal.

I do not see what would be illegal about an executor accessing and withdrawing funds from the account of a deceased person at all. That power derives from the will and not from probate.

These lawyers don’t think it is legal, so probably best taking legal advice before doing so . .

As long as the executor is acting honestly and in good faith, then I do not see why there would be any problem.

Didn’t the ‘honesty’ and ‘good faith’ evaporate when they didn’t tell the bank the account holder was deceased (and when the accounts would be frozen) and then used the dead person’s details to pretend to be them.

In my opinion, no, as long as nobody was defrauded, which I assume is the point of banks having such a rule.

And I was taking issue with the claim that doing this would be "illegal". Transgressing a bank's T&Cs is not a matter of breaking the law, but merely being in conflict with the bank's internal guidelines. I sometimes lend my debit or credit card to someone else. That too violates bank T&Cs, but it is never a problem and is not breaking any law.

[AF62]

I do not see what would be illegal about an executor accessing and withdrawing funds from the account of a deceased person at all. That power derives from the will and not from probate.

These lawyers don’t think it is legal, so probably best taking legal advice before doing so . .

As long as the executor is acting honestly and in good faith, then I do not see why there would be any problem.

Didn’t the ‘honesty’ and ‘good faith’ evaporate when they didn’t tell the bank the account holder was deceased (and when the accounts would be frozen) and then used the dead person’s details to pretend to be them.

In my opinion, no, as long as nobody was defrauded, which I assume is the point of banks having such a rule.

You are arguing that knowing you should tell a bank the account holder is dead but failing to do so and then knowingly using the dead person’s bank details to impersonate them and withdraw all the money is honest and acting in good faith because your ultimate intention was not dishonest.

Hmmm

And I was taking issue with the claim that doing this would be "illegal". Transgressing a bank's T&Cs is not a matter of breaking the law, but merely being in conflict with the bank's internal guidelines. I sometimes lend my debit or credit card to someone else. That too violates bank T&Cs, but it is never a problem and is not breaking any law.

Explaining to the police why there is the dead person’s money in your account after you had impersonated the dead person to get around the bank rules and the probate legislation, and that you were going to hand the various portions over to the other beneficiaries, honestly you were.

That would be an amusing interview.

[Lootman]

As long as the executor is acting honestly and in good faith, then I do not see why there would be any problem.

Didn’t the ‘honesty’ and ‘good faith’ evaporate when they didn’t tell the bank the account holder was deceased (and when the accounts would be frozen) and then used the dead person’s details to pretend to be them.

In my opinion, no, as long as nobody was defrauded, which I assume is the point of banks having such a rule.

You are arguing that knowing you should tell a bank the account holder is dead but failing to do so and then knowingly using the dead person’s bank details to impersonate them and withdraw all the money is honest and acting in good faith because your ultimate intention was not dishonest.

Hmmm

And I was taking issue with the claim that doing this would be "illegal". Transgressing a bank's T&Cs is not a matter of breaking the law, but merely being in conflict with the bank's internal guidelines. I sometimes lend my debit or credit card to someone else. That too violates bank T&Cs, but it is never a problem and is not breaking any law.

Explaining to the police why there is the dead person’s money in your account after you had impersonated the dead person to get around the bank rules and the probate legislation, and that you were going to hand the various portions over to the other beneficiaries, honestly you were.

That would be an amusing interview.

Now you are just being ridiculous. Nobody is stealing anything here. It is just an executor doing his job of collecting the assets of the deceased.

If you gave me your passwords with the express intent of me using them in such a situation, and I then do so with honest intent, then that is not illegal. It may technically breach a bank's T&Cs. It may in some cases cause an issue down the road if I am subsequently careless. But it is not a crime.

[AF62]

As long as the executor is acting honestly and in good faith, then I do not see why there would be any problem.

Didn’t the ‘honesty’ and ‘good faith’ evaporate when they didn’t tell the bank the account holder was deceased (and when the accounts would be frozen) and then used the dead person’s details to pretend to be them.

In my opinion, no, as long as nobody was defrauded, which I assume is the point of banks having such a rule.

You are arguing that knowing you should tell a bank the account holder is dead but failing to do so and then knowingly using the dead person’s bank details to impersonate them and withdraw all the money is honest and acting in good faith because your ultimate intention was not dishonest.

Hmmm

And I was taking issue with the claim that doing this would be "illegal". Transgressing a bank's T&Cs is not a matter of breaking the law, but merely being in conflict with the bank's internal guidelines. I sometimes lend my debit or credit card to someone else. That too violates bank T&Cs, but it is never a problem and is not breaking any law.

Explaining to the police why there is the dead person’s money in your account after you had impersonated the dead person to get around the bank rules and the probate legislation, and that you were going to hand the various portions over to the other beneficiaries, honestly you were.

That would be an amusing interview.

Now you are just being ridiculous. Nobody is stealing anything here. It is just an executor doing his job of collecting the assets of the deceased.

Yes honestly officer, this money sitting in my account doesn’t belong to me and I did pretend to be the dead person knowing I shouldn’t, and I was going to pass it on to the beneficiaries, honestly officer…

Let me know how that goes.

If you gave me your passwords with the express intent of me using them in such a situation, and I then do so with honest intent, then that is not illegal. It may technically breach a bank's T&Cs. It may in some cases cause an issue down the road if I am subsequently careless. But it is not a crime.

But you know you should tell the bank their account holder is dead. You know you should obtain probate. You know that the bank wouldn’t hand you the money unless you pretended to be the dead person.

Honesty and good faith - don’t think the bank would agree.

[Lootman]

If you gave me your passwords with the express intent of me using them in such a situation, and I then do so with honest intent, then that is not illegal. It may technically breach a bank's T&Cs. It may in some cases cause an issue down the road if I am subsequently careless. But it is not a crime.

But you know you should tell the bank their account holder is dead. You know you should obtain probate. You know that the bank wouldn’t hand you the money unless you pretended to be the dead person.

Honesty and good faith - don’t think the bank would agree.

1) I will inform the bank of the death. The timing of that is an executor decision.
2) I am not impersonating anyone. I am acting as the executor using the powers vested in me by the will.
3) Often an estate can be administered without probate, so I do not "know" that I "should obtain probate".
4) The bank is free to agree or not agree. I can demonstrate the probity and legality of my actions.

Obviously you would not be comfortable doing this. I am, in some circumstances.

[GeoffF100]

I still have a lot of bank term accounts holding less than £85K. The interest rates are now rubbish, but it will not be long before they mature. I could roll them over, but I would be paying a lot of tax at present interest rates. Low coupon gilts and developed world ex UK equities are more tax efficient. The interest rates for cash are rubbish. I am using a money market fund for that.