How secure are my bonds?

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Q: We have less than £50k with RBS (Natwest) which we believe must be safe. However, we also have a Flexible Investment Bond with Natwest which is valued at more than £50k and a With Profit Bond with a value of more than £35k which is managed by Norwich Union, but through (or is it on behalf of?) Natwest. Can you advise how secure are these bonds - especially if Natwest were to "do a Northern Rock"?

A: As you correctly say the government recently increased the compensation scheme for private depositors to £50,000 per person per banking licence (be careful as two different brands may only have one licence, such as First Direct and HSBC). Therefore if you hold less than £50,000 in cash with them this would be fully protected. The Flexible Investment Bond would not fall under the same arrangement as it is not a cash deposit it is an investment bond. This would fall under the FSCS which is a compensation scheme for retail investors where financial administrations are no longer trading.

The Norwich Union Bond is held with Norwich Union although arranged through an adviser at Natwest. This would fall under the same compensation scheme as the Natwest Bond.

Answered by:

Kelvin Lillywhite
IFA
Albany Financial