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Could offshore savings account avoid possible UK collapse?

Financial Advice | General Helpful? 4

Asked by jimford, submitted 29 May 2013.

Open Quote If the country does go into liquidation, as I fear, would putting my savings into an offshore account save me from a government grab?End Quote

Answered by Justin on 23 August 2013

I suppose the answer depends on your degree of scepticism.

If we assume the Financial Services Compensation Scheme (FSCS) remains robust then you would be covered up to £85,000 per person per institution if the banks go bust.

Of course, if our country goes bust you might argue the FSCS would go down the pan as well, since the banks it’s funded by might be bust and the Government wouldn’t have the cash to step in and bail out savers. In this case, yes, you could lose money although I think the chances of this scenario are very slim.

The security of holding your money in an offshore bank account depends on the financial strength of your chosen bank and the compensation scheme, if any, that operates in the country where the account is held. However, if the UK does truly sink then chances are quite a few other economies will have done the same, so an offshore account may not be immune depending on where it’s held.

If you are seriously concerned, pick a country that you feel will be financially strong long term and has a robust regulatory system and compensation scheme. And choose a local bank rather than global bank that might be sunk due to bad things happening elsewhere.

Please note this answer does not constitute a recommendation or financial advice and should not be relied upon when making specific investment or other financial decisions. You should always undertake your own research into whether a product or service is appropriate for your needs and, if necessary, use a qualified professional adviser.

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