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OFFSHORE BANK WARNING TO BRITISH SAVERS

Offshore savers should check their accounts carefully

Sunday October 12,2008

Savers with cash in offshore accounts should urgently check whether they have any protection against their bank going bust.

The Isle of Man on Thursday increased its deposit protection to £50,000 per person, although it is not clear if this will apply retrospectively to customers of failed Icelandic bank Kaupthing, which operated accounts from the island.

The previous limit was £20,000.

But regulators on Jersey and Guernsey have yet to introduce any type of deposit-protection scheme.

Savers with Landsbanki Guernsey, which two years ago took over Cheshire Building Society’s accounts on the island, could be left penniless after its parent company was declared insolvent by Iceland’s government.

Holders of mainland accounts with the failed Icelandic banks are now safe after some deposits were transferred to Dutch bank ING, and the rest fully guaranteed by the Government.

But no help has been provided for offshore accounts.

Geoff Penrice at Bates Investment Services said: “Savers should seriously consider looking at moving their cash to a bank or building society which is under a compensation scheme, so if the worst happens they can make a claim.”

Phil Cookson from Manchester told Your Money his parents had £50,000 held with Landsbanki Guernsey.

He said: “When they retired to Cyprus they were advised to open an offshore account as it would make it easier to transfer money. This was not about avoiding tax. Now they stand to lose the lot.”