How would I make an Icesave claim?

By THIS IS MONEY
Updated: 12:01 EST, 8 October 2008

I have money trapped in Icesave? If I have to make a compensation claim how will it work and how much will I get? IS, London

Shut out: Icesave savers cannot withdraw cash

Simon Lambert, of This is Money, replies: Chancellor Alistair Darling promised on 8 October 2008 to stand behind 300,000 UK savers with Icelandic bank Icesave, guaranteeing deposits 100%.

A Treasury spokesperson said: 'All Icesave retail deposits are 100% guaranteed, over and above the £50,000 limit.'

This will mean that Icesave savers who are forced to make a compensation claim will go to the Financial Services Compensation Scheme for their money, which has been putting plans in place to deal with this eventuality.

It is not clear how long this would take, but it is hoped that savers would get their cash within six weeks, as pledged recently by the Government in its review of the compensation scheme.

• More Icesave answers

The FSCS told This is Money it aims to make all compensation applications as easy as possible for consumers and said that would mean that any UK savers would only need to complete one form. The FSCS would deal with the application for UK savers, meaning they would not have to go to the Icelandic authorities themselves.

The Financial Services Authority has published a notice on the consumer section of its website saying: 'Icesave is no longer processing new deposits or withdrawal requests from customers.

'If, as expected, the Icelandic authorities put the firm into insolvency proceedings this would trigger a default under the Financial Services Compensation Scheme (FSCS). In this case, savers with Icesave could make a claim to get their money back.'

What about Heritable Bank?

Heritable has had its 22,200 customers with £538m in savings sold to Dutch bank ING. These will now be protected up to €100,000 (approximately £77,000) by the Dutch compensation scheme, which raised its maximum level of compensation yesterday from €38,000.

The FSA had yesterday released a statement saying that Heritable Bank had appointed administrators from Ernst & Young, who have said all savers' deposits were safe - including those above the UK's £50,000 compensation limit.

On behalf of the joint administrators, Alan Bloom, said: 'We would like to stress that all retail savers' deposits are safe, as they have been transferred to Deposits Management (Heritable) Limited, a company owned by the Treasury.

'The Financial Services Compensation Scheme will repay the first £50,000 due to each retail depositor with the Treasury covering the balance.'

This statement has now been superceded by the sale to ING.