Saved from Icesave

A year or two ago all my friends and colleagues were moving their savings to Icesave and earning extremely competitive interest rates.

I didn't. Was this a smart and insightful move? I wish. I'm just lazy.

I procrastinate and I hate that about me. However, in this particular case I seem to have been rewarded. Setting up an Icesave account was on my list of things to do. Sadly, I'm not sure that reinforcing laziness as a virtue will benefit me in the long run. This time it was just a fortuitous accident. Although the government has now pledged to fully compensate all private depositors, which I believe is clearly the ethical thing to do, it must be hard on those to will no doubt have to wait months and go through red tape to recover their savings.

I really don't get the logic behind the Financial Services Compensation Scheme. Why is there a £50,000 limit? I really don't see how it makes sense as a fixed amount rather than, say, a percentage. It will simply encourage depositors to open multiple accounts with different banks, which of course I've done. How does that help anyone? Why should one person with two bank accounts deserve more compensation than if they had just one bank account? In practice the government has pledged that depositors will not lose their savings, which makes me wonder why the £50,000 FCSC compensation guarantee exists at all.