Banks/banking

[ginislife]

I've posted here as more people will have an opinion I guess

A relative has died. Aged 98. I'm executor of the estate. I've found a bank account with a High St bank containing £000s. Way more than the limit for compensation if the bank went under. She moved it there back in 2017 from another bank where it was invested in some sort of bond from what I can tell. She doesn't appear to have been getting any interest on the money. It somehow seems unethical that they've let her do this. I know I wasn't privy to whatever conversation she had with the bank but there's no letters subsequently telling her she's not covered - and believe me she had kept every single letter she'd ever been sent meticulously narrated on the envelope what it was for - even the junk mail !!! Anyone out there who knows the ethics of this please ?

I guess the first thing to do is to speak to the bank. Move the money as soon as you can, but IME it can take a year or so to sort out.
Banks do vary in their approach to looking out for elderly people. I have had good and bad experiences.

It depends who advised her. Banks tend to only advise on their own products. They are entitled to offer her a shit interest rate - that's what banks do. (0.01%, HSBC?) They wouldn't explicitly point out the compensation limit though it would probably be in the Ts & Cs.

If she got independent advice, that's questionable. The advisor ought to have recommended she spread the money across several banks to get the full compensation if they went under. Not sure what you'd do though about this, you'd have to prove that the advisor gave bad advice.

Remember too that if it was previously invested with a single bank, she would only have been covered to the compensation limit there too. I believe it's per bank, not per account.

I don't think banks have any obligation to make customers aware of better accounts for their money so I don't think you'll get anywhere with that.

With interest rates so low you probably won't find many attractive accounts but obviously safer to spilt below the £85k if you can.

Yes it did occur to me she already had it all in a different bank so the same point applies but at least it was invested there and receiving interest/bonuses I assume. I do intend raising it with the bank when I speak to them but I need to get probate first I guess. I think she moved it from the first bank because there are quarterly letters about management fees and she'd obviously totalled them up as she'd written £3085 annual on one of the letters. I've not looked if she was earning more than £3000 in interest as all this only occurred to me in the car on the way to work this morning.

When opening a bank account she would have been told about the compensation limits. It's then up to her how much she invests. Banks cannot provide financial advice, they can't tell her what to do with her money. She would have needed a financial adviser to do that.

I worked in a bank for years. I can guarantee they told her. A lot of elderly people don't want/understand the advice, just want it where they can see it. I knew so many elderly women in particular who wanted their money in an account with a "bank book" even though this barely paid any interest, they just felt safer that way, even though they where losing out, I found elderly men where more likely to take out cash and have loads of it at home. We always advised against it, but that's all we could do

Just to add, a lot of elderly people who are also very financially savvy. I don't want to sound like they weren't, but that's just my experience and I think a lot of bank workers would agree.

@2021hwg I think you're right. I think that's what's happened. It just doesn't sit right with me somehow. But she was very independent and would never let anyone help except my Dad but he wasn't fit to help for the past 15 years.

I echo pp. Yes, they would have told her about the upper limits, it's on every account T&C that I've ever set up for customers, but they can't force folk not to invest over the limit.

If she had £3k+ in interest you're talking £millions not 000s, make sure you go through everything if you're sure she got that much interest!

@Ffsffsffsffsffs she paid £3k in management fees to the previous bank. She didn't receive it in interest. £000s is hundreds of 000s not millions.

I would think it would be quite difficult to credibly suggest that your relative wasn't aware of the FSCS deposit scheme protection OP. Banks and building societies are required to display information in branches and advertising windows, and do so on TV etc. In 2013 the regulators launched their own advertising campaign to educate and restore some consumer confidence. The limits are very clear in all of this advertising.

I'm sorry - I know that doesn't make it feel any better, but if I were you I would focus on the positives - your relative hasn't lost any money and you are able to execute the will successfully as a result.

[quote ginislife]@Ffsffsffsffsffs she paid £3k in management fees to the previous bank. She didn't receive it in interest. £000s is hundreds of 000s not millions. [/quote]
Do you know what kind of management fees they were? That must have been an investment rather than a straight forward account so maybe it did increase in value by more than that over the time she had it.

The PP meant that to have got interest of over £3k you would have had to have invested ££millions at recent low rates I think altough thats not true as until recently £100k would easily have got you £1k per year in interest. It's only in the past year that you'd have had to have had such large sums

And don't get me started on the £100K plus IHt to pay !! 😥😥

This thread is yet another lesson to everyone to sort all this stuff out before you get to a point where you cant manage. We have had such a horrible time sorting out the financial muddle left by 2 sets of parents, we have already got our wills, POA sorted and copied to the DC plus a summary of everything they will need to know regarding life insurance, mortgage etc. Plus, we are giving away as much as we can afford now. It isn't much, but I would rather the DC had it than the taxman.

Interest rates are very low across the board right now, so the bank paying zero interest is just how that market is at the moment. presumably she decided she would rather receive no interest than hand over £3k pa in management fees for an investment which may not have been recouping it.

I have more than the amount covered by compensation limits in a couple of banks because I consider the risk of them going under very low - I work in banking and one is my employer. They would have explained the limits to her, but it was her decision to take the (in my view) minimal risk.

sorry for your loss.

she would have been told and signed something with the information. No-one ever reads the small print, not just elderly people. Just because she kept the letters doesn't mean she read them.

move on and get the money safe now, rather than worrying what might have happened. No grounds for complaint.

This is the classic 'you can lead a horse to water, but you cannot make it drink' situation.

Banks bombard us all with information about the £85k deposit protection limit and what interest rates are available. Plus there's the likes of Martin Lewis and endless comparison sites telling people to switch to get a better deal. It's not their fault people can't be arsed and it's not like she needed the money is it?

And don't get me started on people moaning about IHT that's only levied above a very generous threshold.

@ginislife

And don't get me started on the £100K plus IHt to pay !! 😥😥

Sorry, if there is £100k inheritance tax, are we to assume the estate is in fact, colossal, and you are still likely to inherit money beyond many people's wildest dreams, during a pandemic that has crippled millions of families financially?

Ye gods...

Sorry, a quick fag packet calculation gives an estate worth £525,000. So not what some might consider colossal.

However that is still a long way beyond most people's wildest dreams, and even with the IHT deduction would pay my mortgage off many many times.

If your relative was wealthy enough to pay for financial advice she should have got good advice. The value of investments can, and does go down as well as up.

@Ffsffsffsffsffs Does it say anywhere I'm a beneficiary ?????? I said I'm executor........I do love MN for the instant jump to a conclusion. All the money in the estate has come from 40 years of hard work and 40 years of (taxable) pensions. Very little else. The person lived like a parsimonious nun !! And now the state gets a huge cut. I'm allowed to be pissed off.

@ginislife

And don't get me started on the £100K plus IHt to pay !! 😥😥

What’s wrong with paying IHT? I assume she, you, and any beneficiaries are using state-funded services.

Well the beneficiaries of the will didn't do the 40 years work did they or the parsimonious lifestyle? It's just a windfall for them.

@ginislife

And don't get me started on the £100K plus IHt to pay !! 😥😥

My heart bleeds for you.

She would have been told, I don’t know what you intend to gain from going back and questioning things now?. Your relative was presumably of sound mind and it was her money. I’d let it go.