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Expat savers may get better offshore protection by next year
| Published: | 5 Mar at 6 PM |
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Given the shenanigans at present rife in the expat financial advice sector, many offshore savers are worried about the lack of protection should their investments fail.
Better news may be on the way for those whose investments are placed in the Isle of Man with its present lower level of depositor protection. According to the island’s director of financial services John Spielman, the current £50,000 level is now under review.
Given that bioth the UK and EU levels are set at £85,000, investors may well think that the IOM level is overdue for a change, and Spielman’s ‘full consultation within the industry’ is not expected to be completed until the end of this year at the earliest. Although IOM investors are supposedly already protected by an ombudsman service, online comments as regards the real-time results of complaints are often less than complimentary and occasionally accusatory.
The Channel Islands of Guernsey and Jersey, both of which also provide £50,000 depositor protection, are already wading through a plan to start a financial ombudsman scheme covering both islands. As with the IOM, the majority of investments based in the Channel Islands originate from the UK expat market, although foreigners working in the UK are an emerging market for all three jurisdictions.
According to Spielman, deposits have been little affected by subsidiary bank closures and low interest rates, with the number of Isle of Man job losses also relatively small. However, savers should take note that, over the next few months, the already poor interest rates on savings accounts are expected to drop as low as zero, at which point investors will be simply giving offshore banks still operating on the island free money to play with.
Better news may be on the way for those whose investments are placed in the Isle of Man with its present lower level of depositor protection. According to the island’s director of financial services John Spielman, the current £50,000 level is now under review.
Given that bioth the UK and EU levels are set at £85,000, investors may well think that the IOM level is overdue for a change, and Spielman’s ‘full consultation within the industry’ is not expected to be completed until the end of this year at the earliest. Although IOM investors are supposedly already protected by an ombudsman service, online comments as regards the real-time results of complaints are often less than complimentary and occasionally accusatory.
The Channel Islands of Guernsey and Jersey, both of which also provide £50,000 depositor protection, are already wading through a plan to start a financial ombudsman scheme covering both islands. As with the IOM, the majority of investments based in the Channel Islands originate from the UK expat market, although foreigners working in the UK are an emerging market for all three jurisdictions.
According to Spielman, deposits have been little affected by subsidiary bank closures and low interest rates, with the number of Isle of Man job losses also relatively small. However, savers should take note that, over the next few months, the already poor interest rates on savings accounts are expected to drop as low as zero, at which point investors will be simply giving offshore banks still operating on the island free money to play with.
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