Money News

Brits don’t trust foreign banks

Thursday, 16 April 2009

Writes Hazel Cottrell
hazel.cottrell@consumerchoices.co.uk

Less than half the population would bank with a foreign company now, and many believe the safest place for cash is under the bed!

Following the collapse of Icelandic bank Icesave, 56% of Brits say they will not keep their cash in a savings account with a foreign company, according to a survey from Fair Investment (www.fairinvestment.co.uk).

Furthermore, due to current economic uncertainty, 20% of savers think that the safest place for their cash at the moment is at home in a safe or under the bed.

Sharon Bratley, chartered financial planner at Fair Investment, empathizes with savers, who “have so far been some of the hardest hit victims of the credit crunch”.

She said: “It is hardly surprising that trust in banks has been diminished after things like the fall of Icesave and the bailout of HBOS. However, there are still savings accounts out there which offer a higher rate than under your bed!”

The survey also showed that 31% of Brits have changed the way they save, with 8% splitting their savings between institutions to reduce risk, 6% keeping their cash at home and 8% reducing the amount they save.

Chris Eagle, commercial manager at CreditChoices, urges savers not to give up on foreign banks completely, if they want to get the best rates on their cash.

He said: “Savings in ICICI (a subsidiary of Indian bank ICICI) are completely protected up to £50,000 by the FSCS. This foreign bank is offering some of the most attractive rates on the market – 4.10% on its Fixed Rate Savings and 2.45% on its HiSAVE Savings account – which are definitely worth considering.”

“However, if you want to keep your savings closer to home, you could do worse than Sainsbury’s Internet Saver, which has just been named most consistent internet savings account by Moneyfacts (www.moneyfacts.co.uk) for the fifth quarter running.”

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