Chancellor guarantees London Scottish accountsLondon Scottish Bank goes into administration
01 December 2008
Alistair Darling has acted fast to allay fears that money saved with London Scottish Bank, which has collapsed, might be lost.
Around 10,000 people have savings totalling £250 million with London Scottish. But the Chancellor has confirmed that all retail deposits, including those above the £50,000 maximum limit for automatic compensation through the Financial Services Compensation Scheme (FSCS), will be protected.
The Manchester-based bank, which offers savings accounts and lends to people with poor credit histories, is the latest victim of the economic crisis. It called the administrators in after suffering a shortfall in regulatory capital, having recorded pre-tax loses of £7.4 million in six months to April 2008, and was unable to find a buyer in time.
Commenting on the bank’s demise, the FSA confirmed: ‘The FSCS is now putting arrangements in place to pay back customers and will provide further information for customers shortly. The Chancellor has taken action to protect FSCS-eligible retail depositors above the FSCS limits.’
For more information on the Financial Services Compensation Scheme, visit www.which.co.uk/advice/protecting-your-savings