Foreign Perspectives

Unless you’re planning on putting the cash under the mattress, you’re going to need another bank or building society to put your money in when you take it out of the Northern Rock, but which one?

Many people will just look up the best buy tables and find that ICICI bank is right up there at 6.3% and move it right over. Somehow I’m not totally sure that putting your life savings in an Indian bank is such a good move.

Next choice would be West Bromwich though that’s a fairly small building society, whether they could cope with the arrival of ex Northern Rock customers is another matter.

Bank of Scotland seems the best bet to me with 6% from £5000 although that limits you to 4 withdrawals per year before the rate drops substantially.

But if you’re looking for absolute security, there’s only one choice: National Savings. 4.1 % from £5000 on their Investment Account, 5.15% from £50,000 on their Easy Access account. Deposits with them are effectively deposits in the Bank of England which can’t go bust. You can open these in the Post Office or online (note: these accounts are not the same as the Post Office savings account).

When a bank announces that it has a problem, the first reaction of just about everyone is to take out their money and put it somewhere else, but should you do that?

You’ll probably have heard that there’s “no problem” and that the Bank of England won’t let any bank go bust. Well, as it happens they most definitely have let banks go bust in the past. Not terribly often, granted, and the last time was with BCCI way back in 1991 in somewhat different circumstances but you certainly can’t rely on statements by various people who say that the BoE would never let a bank go bust because they are wrong: it has. More recently, Equitable Life has also been allowed to, in effect, go bankrupt.

If you’ve got a large chunk of your life savings in the Northern Rock you’d be crazy to rely on people just assuming that the Bank of England won’t let them go bankrupt. If you couldn’t do without that money, take it out.

Won’t that make life more difficult for Northern Rock? Yes, it certainly will. However, even if everything works out, chances are that within the next few days you will find that the conditions on your instant access account have been changed so that you need to give them notice to withdraw the money. Do you really want to take the chance that things won’t “work out”?

What should be learnt for this lesson is that you should NEVER keep all your money with one financial institution no matter how good their reputation (and don’t forget that the reputation of Northern Rock was very, very good). The maximum payout should things go really badly wrong is £18,000 £31,700 (100% of your first £2,000, 90% of the next £33,000).

What’s really likely to happen?

Last time this kind of thing happened was in 1991 with the Town & Country Building Society (the 15th largest society in the country at the time) which was subsequently taken over by the Woolwich (now part of Barclays Bank) in a rescue operation. Something similar seems likely to happen in this case too although it’s more complicated in some ways as the Northern Rock is a listed company rather than being a mutually owned building society.

We’re just beginning to get our heads above water and wondering how we did (no time for that in mid-Summer!).

June was down a little as could be expected as I was off in Belfast for almost all of it which meant that we needed to leave our availability a little bit more loose than we would do normally ie we couldn’t list more rooms than we actually have as we normally do over the Summer. If you’re doing that, you really need to be on top of the bookings as they come in and close down availability on systems as you fill up.

July was also down a little as I wasn’t back ’til the end of the first week so same problem as June. Also we had the first “visa booking” of the year: 20 days in a row and cancelled just a few days in advance. As a consequence of that, we’ve tightened up considerably on potential “visa bookings”. When we get one, we give them two options: 1) pay the full balance and we help you get the visa or 2) we cancel the booking and inform the French embassy. We’re currently sitting with two of these; we fully expect the South African to cancel in that she’s made no acknowledgement of any of our e-mails. Hard to say about the guy from Barbados as he has been very keen to pay the balance.

We’d fewer Visa pour l’Image bookings than expected but then we were quite full over that week with other people so didn’t really have the availability for any more people.

So far, it’s very hard to say how the rest of the year will turn out. We’ve nothing for November or December which isn’t unusual but the bookings for October are also fairly low for this time of year.

The pattern of bookings from the Spanish is quite different from all the other nationalities that stay with us.

For everyone else, the bookings are spread right through the year, albeit with a lot more people coming over the Summer peak. However, with the Spanish there are a series of periods of one or two days when all of a sudden we’re almost completely full with bookings from Spain.

We thought we’d gotten used to the general pattern of these bookings last year ie lots around January 5th, the week before Easter and one other weekend but this year we’re getting a lot more of these clumps. Why? We’re not completely sure but it looks like one of the sites that we list with has bumped up their promotion in Spanish markets.

Not that I’m running out of photographs but I thought that it was time that I started on the regional guides for our Whole Earth Guide so after a little enhancement of the code for the site, the Languedoc-Roussillon guide made its debut this evening.

It mightn’t look terribly spectacular but that simple enhancement is the first step to let me start integrating the guide into the various B&B/self-catering listings sites though I’ll need to run up a few more regional guides to make that worth doing. Courtesy of the way which the software works, you’ll see at least one detailed article for each of the regions which I roll the guide out to.

Still haven’t made a bean on the guide as yet but hopefully that’ll begin to change over the next month or so as the various articles are coming pretty well on google searches.