Couple furious with society over loss of £309,000 in savings
AN elderly couple blame the Derbyshire Building Society for losing their life savings and "cutting them off" from their family.
James and Patricia Ellis, who live in New Zealand, fear they will never see older relatives again after they lost £309,000 which they thought was safely deposited in the bank.
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SHOCK: James and Patricia Ellis.
They are among savers who say they are still millions of pounds out of pocket because the society passed their accounts on to an Icelandic bank, Kaupthing, which collapsed.
The couple moved from Hartington to New Zealand in the 1960s but have regularly returned to Derbyshire to visit family and were thinking about moving back in their twilight years.
Now they say their visits are no-longer possible and neither is their hope to return.
Mrs Ellis, 75, said she was worried she may never see her sister, Janet Oliver, 73, again.
She said: "We are now cut off from our family much to their horror – especially my sister.
"I'm worried we may not see each other again. She can't afford to come out to New Zealand and we can't afford to go back.
"We have nieces, nephews and cousins in Britain, some in Derbyshire, who we would like to visit as well."
Depositors' accounts were with an Isle of Man-based subsidiary, Derbyshire Offshore, which the Derbyshire sold to Kaupthing Isle of Man which collapsed last year.
When Kaupthing's Isle of Man arm was liquidated, the former Derbyshire depositors, some of whom had hundreds of thousands of pounds of savings, were left with the choice of accepting either a £50,000 lump sum or 24.8p in every £1.
The Ellis' picked the latter option and received about £100,000 of the £409,000 they invested in the late 1990s.
Mr and Mrs Ellis, now of Auckland, made their cash from inheritance and their own work, James in shipping and Patricia in retail and as a secretary.
Mr Ellis, 85, said the £100,000 was now in an offshore account in the Channel Islands and that the couple didn't want to touch it as it was to support Patricia.
He said: "There is an age gap between the two of us and I wanted to make sure we had the cash to provide for her if I was over the hill.
"Also, if I wanted to bring the money over to New Zealand the exchange rate is poor so we would lose yet more money.
"We are absolutely appalled that our life savings held in a no-risk low interest cash account could possibly be gone.
"When the Derbyshire Building Society was taken over we sought reassurance of the new owner and this was provided."
A spokesman for Derbyshire Building Society, which merged with Nationwide last year but still operates under its own name, said: "Since the financial crisis began, Nationwide has worked closely with the regulatory authorities in the UK to secure a positive solution for all customers who may be adversely affected."
Provisional liquidator Mike Simpson, of PwC Isle of Man, said the timing and value of future payouts was uncertain, but a second helping of cash was likely in December.
5 Comments
by Les, USA
Tuesday, October 27 2009, 2:13PM
“i agree with the first Angela comment and not the second. I assume its a different person.
we had savings in low interest just because it was easier to get to the money when we needed it. As stated above, UK banks were not available to us and we had the same feelings about leaving the money in the Derbyshire offshore because it felt 'safe' and somewhat 'home'
It just goes to show you can't trust any banks any more. The IOM government and the banking system there is a disgrace. They will feel the impact of this for generations. This is a blight on the UK as a whole, a supposedly trusted banking nation has a seriously tarnished reputaion.”
by Angela, France
Tuesday, October 27 2009, 10:18AM
“Angela, Derby,
May I suggest that you check up on a few basic facts before writing such uninformed, unhelpful and heartless comments? Reasons for banking offshore are multiple and varied, but ¿ at least in the case of the Derbyshire ¿ are mostly not much about getting higher profits and even less about paying less tax (tax on interest received is payable at the normal rate in the country of domicile for tax purposes; EU residents are subject to a with-holding tax and/or to declaration to their tax authorities).
It seems to have escaped your notice that James and Patricia, like the vast majority of former Derbyshire Offshore savers, have lived abroad for many years. It has become well nigh impossible for non UK-residents to maintain, and even less to open, what you call « normal accounts » in the UK. Anyone attempting to do so is immediately redirected to an offshore subsidiary of the bank or building society. Expats like James and Patricia wishing to save money in sterling in readiness for a return to the UK in retirement have little choice but to do so offshore. Why do you think this couple have placed the quarter of their life savings so far recovered from the Isle of Man in another offshore account? They simply have no real choice ¿ UK building societies are closed to them.
As a British citizen living in France for the last 25 years, I chose Derbyshire Offshore, not for its high interest rates (they were not in fact noticeably higher than equivalent onshore rates) and certainly not to avoid tax (which I pay in France, including on all interest received offshore), but because it was a subsidiary of a British Building Society which I believed I could trust as a safe and secure refuge for my savings. How wrong I was! The Derbyshire sold us out to an Icelandic bank with no possibility of withdrawing any money invested in fixed-term deposits (those who tried and were willing to pay the penalty were refused) and in less than a year our money was gone.
In recent years the Derbyshire offered slightly higher interest rates for their offshore fixed-term bonds, which were aggressively marketed to their UK-based customers right up to the date of sale to Kaupthing. In retrospect, this was a determined and cynical attempt by The Derbyshire to increase the depositor base of their offshore operation prior to sale. The Derbyshire is morally responsible for the present plight of those it misled and then sold down the river.”
by Malcolm, France
Tuesday, October 27 2009, 9:21AM
“The idea that all people who opened an offshore account were chasing high interest is a myth, most people working abroad have difficulty in opening an account in the UK due to the ¿know your customer policy¿ practised UK banks and therefore have no choice but bank offshore.
It is also a myth that offshore rates are always higher, Building Societies use their offshore operations to provide a cash stream to help finance their mainland business and the rates they offer reflect their need for cash at any one time. A quick visit to an interest comparison website will confirm that there is little disparity between UK and offshore rates.
Those working offshore often in dangerous and difficult jobs also provide a valuable service to the UK economy as they repatriate some £5 billion a year which offsets the £3billion a year which is sent abroad by foreign workers in the UK. Many of the people who lost their savings are coming to the end of their working lives do not have houses in the UK or company pension schemes and many had been with the Derbyshire Offshore for years some since its creation in1990. Their savings were their pension and housing for their retirement in the UK they do not deserved to be robbed of it by cynical manoeuvrings of incompetent Building Society directors who had bought the Derbyshire Building Society to the point where it had to be rescued by the Nationwide.”
by Angela, Derby
Monday, October 26 2009, 1:25PM
“This is the pitfalls of putting money in offshore accounts for the higher interest paid, the fact that it is high interest is the reason people put their money in. If they had left in a normal account that paid normal interest then not only would they still have their money they would have had to pay tax on it. This is their own fault in many ways for trying to get higher profits and less tax.”
by Disgusted, The coast
Monday, October 26 2009, 9:26AM
“This is disgusting. The banks should be held to account. If this couple had conned someones life savings out of them they would be in prison.
I'm currently being shafted for £6k in penalty charges by a bank as I have to move house for a job on the south coast and have reduced my house to sell! Its a one way street. Yes I signed up to it, but that was before the banks caused job insecurity, job losses, house price reductions and a recession all of which meant that to ensure that I could continue to look after my family I need to move. Thanks alot banks!!”