From: "JethroUK" 
Newsgroups: uk.finance
Subject: Re: Offset Savings against Mortgage if Bank Goes Bust
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Date: Sun, 23 Sep 2007 21:47:18 GMT
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"Tom Bradbury"  wrote in message 
news:UJAJi.5542$yN2.4036@newsfe7-gui.ntli.net...
>> If I have £100k mortgage and £50k savings, would the safest place for my 
>> savings be the bank/bs where I have my mortgage?
>>
>> Would I be seen as a customer with £50k debt or are the two items 
>> considered separate.
>>
>> Just hypothetical in my case.
>>
>
> I asked Egg the very same question last week when all the stuff was going 
> on with Northern Rock.  I have an offset mortgage with Egg.  Mortgage is 
> now not far from being completely offset by savings.  I asked Egg what 
> would happen if the bank went bust - would I only be indebted to the bank 
> for the net difference between mortgage and savings?  Egg said no - I 
> would be fully liable for the outstanding mortgage, but the first £35,000 
> of savings would on be guaranteed, but would only get £31,700 back.  I 
> might lose anything above £35,000.  That makes me feel somewhat 
> uncomfortable.

I would have to say they are speculating in their favour - morally/legally 
they would have to consider both credit and debit and the difference between 
the two  - course you wouldn't volunteer to replace any monies of yours that 
they had lost and they would have to take you to court and they would lose