27th October – Electronic compensation process for Icesave customers to start in the second week of November
The Financial Services Compensation Scheme confirmed on Friday 24th October, that Icesave UK customers will be able to reclaim their Icesave savings through an accelerated compensation payment process. The FSCS expect to launch the Icesave compensation process in 10 days time through an accelerated electronic process designed to allow for quicker payments for Icesave UK savers.
The FSCS confirmed that the compensation process will mean that Icesave UK savers should be able to reclaim their Icesave savings through an electronic payment to their linked accounts. The FSCS will write to people outlining how the process will work, then again with instructions on how to complete the transfer. The Icesave compensation process will be phased to allow them to manage the flow of compensation payments through the system and for security reasons.
The FSCS expect the first Icesave compensation payments to start in the second week of November.
20th October – Proposals for accelerated Icesave payments being considered
The FSCS have stated that the UK Authorities are working on the exact detail of alternatives to the conventional, form-based compensation process. Significant progress has been made with their Icelandic counterparts on an accelerated approach to paying compensation, which has been agreed in principle.
The FSCS Chief Executive – Loretta Minghella, has reiterated that for savers entitled to their protection their savings are safe. The FSCS paramount concern is to get Icesave UK Savers' savings back as soon as possible. The FSCS is working closely with Icesave to get timely access to the data to verify claims.
The FSCS expect to be able to give exact guidance next week about how Icesave UK Savers can reclaim their savings.
16th October – latest Icesave update
I spoke to the Financial Services Compensation Scheme people this afternoon and the latest situation is that they don't yet have an exact date when the compensation forms will be sent out, but they did confirm that the FSCS will contact people affected directly. They remain hopeful that customers will only have to deal with the FSCS and expect to have some firm news by close of business tomorrow (Friday 17th).
15th October: Icesave - latest update from HM Treasury and Icelandic Authorities
UK Treasury officials have met their Icelandic counterparts and significant progress was made on retail depositors of Icesave. Arrangements have been agreed in principle for an accelerated payout to Icesave depositors.
A spokesman from the Financial Services Compensation Scheme has said that they have been inundated with customers wanting to know if they have to make two separate compensation claims, one to Iceland and one to the Financial Services Compensation Scheme. They remain hopeful that Icesave customers will only have to make one compensation claim through the Financial Compensation Scheme. A further update is expected by the end of the week.
The HM Treasury continues to give reassurances to Icesave customers that their money is safe and secure.
13th October - Icesave compensation forms to be sent out
Icesave's UK customers should be able to find out on Friday about how they will be able to reclaim their savings. A spokesman from the Financial Services Compensation Scheme has said that Icesave's UK customers will receive application forms for compensation for their lost savings in the next week.
Icesave's UK customers should have received the first €20,887 from the Icelandic compensation scheme with the Financial Services Compensation Scheme topping up the rest to £50,000 per person per institution. However, Alistair Darling has said that the UK Authorities would guarantee all savings for Icesave's UK customers. It's also likely that Icesaver's UK customers will only have to complete one compensation form to reclaim their lost savings.
9th October - Latest update from HM Treasury:
The UK authorities expect that Landsbanki will soon be declared in default. Should that occur, the Chancellor has put in place arrangements to ensure that no retail depositor will lose any money as a result of the closure of Icesave.
The Treasury and the Financial Services Compensation Scheme are working with the Icelandic authorities and their Deposit Insurance Scheme to ensure that depositors are paid back as quickly as possible. The Chancellor has also spoken to the Icelandic Finance Minister about the importance of the Icelandic authorities ensuring that UK depositors in Icesave are given the same protections as depositors in Iceland and receive their deposits back in full promptly.
Arrangements are being put in place to ensure that all ISA customers of Icesave will continue to benefit from the tax-free status of their accounts. The Chancellor has also today taken steps to freeze assets of Landsbanki in the UK until the position with respect to the future of the firm and UK creditors becomes clearer.
8th October: Icesave UK customers - Darling to the rescue
Chancellor Alistair Darling has told the BBC that he would ensure that the 300,000 UK savers with Icesave get their money back. Alistair Darling also told the BBC that "the Icelandic Government have no intention of honouring their obligations... and because Icesave is a branch of a foreign bank the first call would be on the Icelandic compensation scheme, which hasn't got any money in it."
The UK Government has accused the Icelandic Authorities of reneging on their obligations and has pledged to give extra help to UK savers with Icesave. The UK Financial Services Compensation Scheme tops up the level of protection to £50,000, but UK savers with more than £50,000 with Icesave would loose out. But, Alistair Darling was quoted by the BBC as saying that "he has decided in these exceptional circumstances that we will stand behind those depositors so they get all their money back."
Article published 7th October 2008
Icesave freezes savings accounts
Icesave's parent company, Landsbanki, has today been taken over by the Icelandic government to stop it collapsing. The FSA has said that it was expecting Landsbanki to be declared insolvent, following its takeover by the Icelandic Financial Supervisory Authority.
The Icelandic Financial Supervisory Authority have stated that they "took control of Landsbanki to ensure continued commercial bank operations in Iceland, domestic deposits are fully guaranteed and Landsbanki's domestic branches, call centres, cash machines and internet operations will be open for business as usual."
Icesave has frozen all deposits and is not currently allowing customers to take money out of their savings accounts, or put in new deposits.
The Icelandic Government's guarantee only covers domestic customers and does not extend to UK savers with Icesave. UK customers of Icesave are likely to have to claim compensation for their savings deposits in Icesave. Icesave customers in the UK will have to make two separate claims:
A spokesman for the Financial Services Compensation Scheme has however indicated that they will probably handle all UK claims on only one form.
If you are a UK saver with Icesave and are concerned we would suggest that you refer to the Financial Service's Compensation Scheme website which provides some useful information on making a claim.
Article published 22nd Sept 2008.
Icesave regularly hits the headlines as it offers savers very competitive interest rates and is regularly in the Cash ISA and Fixed Rate Bond savings best buy charts. Icesave has also attracted some negative comments in the press concerning Icelandic banks with commentators questioning whether your savings are safe with Icesave and also Kaupthing.
Icesave offers UK savers exactly the same level of protection as any UK registered Bank and Building Society.
Icesave is one of several European Economic Area ("EEA") Banks, which includes Bank of Ireland, Anglo Irish and ING Direct, who have topped up into the UK Financial Services Compensation Scheme. This means that Icesave, Bank of Ireland, Anglo Irish and ING Direct offer savers the same level of protection (currently £50,000) as every FSA regulated UK Bank and Building Society. Kaupthing Bank has topped up into the FSCS, however, the bank operates under the full FSA authorisation status granted to Kaupthing Singer & Friedlander (a UK registered company) which means that its depositors are fully protected by the FSCS up to £50,000.
For EEA Banks the financial compensation scheme (often referred to as a “passport scheme”) is provided by two schemes. The end result is that the total amount of your savings protected is £50,000. In the example of Icesave, the savings protection works as follows:
Under European Union law, compensation for any losses incurred due to the failure of a Bank should be paid within three months, regardless of whether it is through a "passport scheme" or the UK Financial Services Compensation Scheme.
Tags: savings, icesave