If you thought your savings were safeguarded by the Government, you should read this and start planning or panicking, or both.
If another financial crisis gets underway – do you think that the money you have earned, paid tax on and put in a bank for a rainy day or for an unexpected bill is safe? Because if you do, you’re wrong. The governments are no longer going to be responsible for bailing out the big banks.
You thought that our Government had guaranteed to safeguard £85k per person per account (as long as those accounts are in separate banks and not part of the same group of banks). Therefore in theory, if you have £75k in Santander and £75k in First Direct, you would be confident that both those sums were protected. Right?
In December 2015, David Cameron signed away your rights to all your savings in the event of the next financial crash. If there is a major crisis, the bank can call on ALL your money, every last penny. This apparently applies to all depositors in a bank including limited company bank accounts.
Why is this relevant? Well, because right now Italy has horrific levels of bad debt and it’s predicted that 4-6 major banks could fail. Also, if Matteo Renzi loses the referendum and the right wing (Five Star and Northern League) form a coalition government, they could remove Italy from the euro.
This could send the euro plummeting and if you are invested/deposited with a bank that’s heavily tied into investments and loans in mainland Europe, the financial crisis will spread to them. You might suddenly find that Santander, for example, whips away all your savings to pay off its debts that IT got itself into.
The UK is a major financial centre. If anything bad happens in the banking world, we feel it first, and your hard-earned, tax paid savings will be used to save ‘them’ this time.
Take a careful look at this article and then take a good hard look at where your money is. If it’s not securely in a bank with limited European investments and loans – or big enough to weather the storm – then you should think about moving it, quickly.