Time's Running Out For Icesave Compensation

Savings and ISAs

Updated on 17 February 2009 | 17 Comments

Get your skates on Icesavers. There's only three weeks left to claim compensation online.

It has been two months since the shocking news that Icesave had gone bust after the collapse of its Icelandic owner, Landsbanki.  Even worse was to follow when the Icelandic government immediately announced it had no intention of keeping its promise to partly reimburse UK savers in Icesave.  

Since that time the UK Financial Services Compensation Scheme (FSCS) has moved as quickly as possible to compensate more than 214,000 people who lost their savings.

FSCS has made it possible for the majority of those savers -- over 198,000 -- to put in their claim for compensation online through the Icesave website, with instructions posted on the FSCS website. At the end of last month, FSCS sent out an email inviting savers to claim electronically. 174,000 people have already completed the accelerated claims process, but that means more than 24,000 savers still haven't taken action.

Hurry Icesavers!

If you're one of those 24,000 people who are yet to claim your compensation online, you only have three weeks left to do so.

The online compensation process will be active until 30 December. After this date, anyone who hasn't put the process in motion will have to apply for compensation in writing. FSCS will send a paper application form in January 2009. Once you return the application form to FSCS, it could take up to six weeks before you see any cash.

The online compensation process is designed to make getting compensation for your savings a whole lot quicker. In fact, £3.2 billion has already been paid to UK depositors, so get logged on today before it's too late!

The FSCS is aware some Icesavers are still waiting to get their lost money back. Here's a quick summary of what's happening:

A quick word on paper claims

FSCS say around 17,000 Icesavers are unable to claim compensation online. 16,000 of those have already been sent the paperwork to claim compensation in writing. The remaining 1,000 people will receive application forms shortly.

A quick word on Icesave fixed rate savings accounts

If you took out a fixed rate savings account with Icesave, you have the option to let the bond run its course and keep it in place until it reaches its maturity date, rather than take compensation now. Some savers have chosen to wait and take compensation plus the fixed amount of interest later on, leaving a total of £650 million locked away in fixed rate bonds.

A quick word on Icesave ISAs

FSCS is in the process of sending out ISA certificates to Icesave ISA customers. This certificate allows the ISA to be transferred to a new ISA manager without losing the all-important tax-free status.

For those of you who are still waiting for your certificate, FSCS admitted on Friday there had been a delay affecting a small number of ISA account holders. This has now been resolved. A further 9,000 certificates will be sent out this week and 50,000 the following week.

For further details of the electronic payment process, visit the FSCS website here.

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