Kaupthing Edge and Heritable savers full compensation announced
Following the news that Kaupthing and Landsbanki Heritable had gone into default, the FSCS has provided details of a compensation scheme for Kaupthing Edge and Heritable Bank UK savers.
The Treasury transfered much of Heritable’s and Kaupthing Edges’s retail deposits to ING Direct. According to a statement, any retail deposits not transferred to ING Direct will be paid out through the FSCS. These are said to include 3000 non-internet retail accounts with Kaupthing and 100 retail deposits with Heritable. The FSCS will contact these depositors directly, sending them an application form to claim compensation.
It seems the FSCS will repay up to £50,000 per person for eligible retail depositors while the Treasury will cover the balances of more than £50,000. This means that eligible retail depositors who hold more than £50,000 are fully protected. This follows an earlier announcement that the deposits of 300,000 savers with Icesave would be fully protected.
Loretta Minghella, Chief Executive said the “FSCS has stepped in along with the Government, the Bank of England and the Financial Services Authority to help protect savers at the banks” adding that “people who had their accounts transferred will get immediate access to their accounts and their savings are protected.”
Despite the disaster that has struck these banks a surprising statement from Kaupthing maintained it was safe, blaming the Treasury and the FSA for transferring Kaupthing Edge from the bank’s subsidiary. This, the board argued, automatically placed it in default. “It did not matter that the parent company had sufficient liquidity and its position was solid.“ For thousands of UK savers affected by this episode the only thing that matters is that their savings are safe.
Further information is available on the Financial Services Compensation Scheme website
