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Expat Investor : January February 2009
COMPENSATION But savers must be aware that they won’t receive a penny more than the maximum sum (£50,000) by having it spread across several accounts with the same individual bank. However, joint account holders are treated as individuals and so if you and your partner held a joint account, as much as £100,000 would be protected under this Scheme. Savings with foreign banks All banks established outside the European Economic Area (EEA) must be authorised by the FSA before they can operate in the UK. If these banks failed, your savings would be covered by the UK’s Scheme. Banks established within the EEA are covered under their home country’s compensation scheme, giving a minimum level of cover of €20,000. Some European banks have also signed up to a ‘topping up’ scheme, whereby the FSCS will compensate savers for the difference between the EEA level and the UK limit should their bank go bust. Banks taking part in the top-up scheme include Bank of Cyprus, Fortis, Triodos, and ING Direct. “While ongoing uncertainty prevails about the stability of other financial institutions, savers understandably are moving their nest- eggs to those banks which appear to provide a blanket of security.” In the event that a European compensation scheme is unable to pay out, the FSCS will currently only cover deposits between the EEA limit and its own maximum of £50,000. Were the UK government to announce it was stepping in with special measures, as was the case with Kaupthing’s Icesave, then a larger payout may be expected. To find out if your bank has signed up, check it out at www.fscs.org.uk. Savings protection All savers with more than £50,000 will be asking how their savings can gain 100% protection. Most UK banks are separately authorised by the Financial Services Authority (FSA). For example, all banks within the Royal Bank of Scotland Group plc are individually authorised. So, if RBS Group went down, accountholders of NatWest, Royal Bank of Scotland and Ulster Bank are entitled to claim up to £50,000 of their savings held with each of these banks. January/February 2009 ? EXPAT INVESTOR 19 Other banks may be authorised at a group level. To give such an example, were the HSBC group to go down, accountholders may only claim up to a total of £50,000, regardless of whether they held more than this in other accounts spread across HSBC group companies including First Direct. Lloyds TSB and HBOS are expected to retain separate FSA registrations once they’ve merged which means customers with a Lloyds account and an HBOS account will have protection amounting to the maximum £100,000. Both Alliance & Leicester and Abbey, now owned by Banco Santander, are to be registered under their own licence with the FSA thereby offering a similar level of compensation. Mortgages and insurance The UK’s Financial Service Compensation Scheme also covers investments, mortgages and insurance. ? Mortgage advice and arranging: 100% of the first £30,000 and 90% of the next £20,000 ? Long-term insurance (such as pensions and life assurance): 100% “Some European banks have also signed up to a ‘topping up’ scheme, whereby the FSCS will compensate savers for the difference between the EEA level and the UK limit should their bank go bust.” There are limits to these types of investments as well and these vary according to the type of product. ? Investments: 100% of the first £30,000 and 90% of the next £20,000 of the first £2,000, plus 90% of the remainder ? Compulsory general insurance (such as third-party motor insurance): 100% of the claim ? Non-compulsory general insurance (such as home insurance): 100% of the first £2,000, plus 90% of the rest ? General insurance advice and arranging: 100% of the first £2,000, plus 90% of the remainder Advice for compulsory insurance is protected in full. Find out more by visiting www.fscs.org.uk Investor Serving expats for more than 20 years Serving expats for more than 16 yearswww.expatinvestor.com than 17 years £4.95/ €7.50/US$7.50 £4.95/€7.50/US$7.50 Jan/Feb 2009 email@example.com June 2005 “There are those that you know you should read, and then there’s the magazine you will read.” In this issue 6 Where to invest in 2009 Experts point expats with investment portfolios in the right direction. 14 18 24 Healthcare A vital check-up on health news and views for the new year. Expat issues Read the news that’s impacting on your wallet. Best First person The Fry Group puts a relocation to Hong Kong under the spotlight. Regulars 10 Offshore funds 11 Investment news 12 Offshore savings 21 Property investment 22 Offshore mortgage market ? The UAE and the UK are the lowest-rated destinations for expatriate children. ? Expat children speak more languages and spend more time outdoors than in their country of origin. ? UK ranks as unhealthiest country to raise children. ? Finance centres are the most expensive places to raise a family. Bringing advisers and investors together Investor Serving expats for more than 17 years £4.95/ €7.50/US$7.50 www.expatinvestor.com A new survey reveals Spain, France and Germany are perceived to be the best locations for expats to raise their children. The findings, from HSB Bank International’s Expat Explorer survey, Offshore Offspring, questioned 2,155 expatriates across four continents. The report focuses on the challenges experienced by families raising children while living and working abroad. Expat parents were asked to rate their host country in five areas: ? time their children spent outdoors ? time their children spent studying ? cost of raising children ? number of languages spoken by their children ? whether their children would remain in the country. The UK and UAE were the lowest-rated destinations amongst the expats polled. Furthermore, when asked specifically about children’s health, the UK was judged to be the worst location health-wise to raise children, scoring poorly across all categories – playing sports, eating junk food, playing computer games and me&my easy option Enjoy a great rate and easy access. watching TV. India was judged to be the healthiest country, with Australia ranked a close second. Cost of raising children Spain, India and China are the cheapest countries in which to raise children, with half (55%, 50% and 50% respectively) of expats living in these countries reporting they experienced reduced costs for their children compared to their country of origin. The survey also revealed that finance capitals are the most expensive countries in which to raise children – over four-fifths (85%) of expats living in the UK said they found it more expensive to raise their children, followed by more than three quarters (79%) of parents in the UAE, and two-thirds (64%) of parents in Hong Kong. Outdoor Lifestyle Generally, expats experience a more active lifestyle away from home and this is reflected in the experiences of their children. Almost half (44%) of expats reported that their children spent more time outdoors in their adopted countries. The Mediterranean and countries with wide open spaces scored highly in this category – Australia came top of the table, where more than three-quarters (80%) of parents reported that their children spent more time outdoors, followed by Spain (59%) and France (57%). Academic improvement A third of parents overall said that HSBC Bank International’s largest global study of expatriate living reveals Spain, France and Germany are the best locations to raise a family. their children study more since becoming an expat, with more than half (56%) reporting that it remained about the same. Expatriate children in India topped the table, with two-thirds (67%) studying more so now than before, followed by children in France (57%) and Singapore (42%). Only 10% of expats reported a decrease in study time. Languages Children living in European countries learn the greatest number of languages. Spain had the highest percentages of expat children speaking languages, with almost all (94%) speaking two or more languages. Germany and France also ranked highly, with 87% of expat children also speaking two or more languages. In contrast, just over one-fifth (21%) of expat children in Singapore and Hong Kong (22%) picked up a new language. Overall, almost two- thirds (63%) of expat children speak two or more languages. The length of children’s stay Canada scored highly when parents were asked to nominate where their children would live once they had grown up. One-third of expats currently living in Canada believe their children will remain there and TOP RANKED COUNTRIES Rank Cost 1 Spain Languages Spain 2India Belgium 3 China 3.50% eAccess2 Offshore internet banking for expatriates For more information from our advertisers or about products featured in Expat Investor enter the Fast Facts number onto the Reader Reply Service coupon on page 20 or go to: expatinvestor.com .. Internet Savings Account Gross/p.a. France/Germany locations to raise expat kids Canadian expats themselves also have the highest percentage (43%) of countrymen who expect their children to return to their country of origin. Australian and New Zealand expats are also fonder of their homeland, with 42% and 38% of expats respectively believing their children are more likely to return home. Conversely, close to half (42%) of expats living in China believe their children will return to their individual countries of origin. “The expat community is so diverse and there are many factors that come into play when deciding to relocate to another country,” said Aaron le Cornu, Deputy Chief Executive Officer. “We have seen through this report that there are very different reasons behind a single expat’s choice to move when compared to those who have families to think about. Our third and final report still to come, Expat Experience,will examine another aspect to expat life and what many consider to be a pivotal factor – how easy it is to integrate in their new country.” To find out more about HSBC Bank International’s expatriate banking products and services, enquire through the fast facts number below. Fast Facts 22120 Outdoor Australia Spain France Study India France Singapore Longevity Canada US Germany .. Minimum balance only £1,000 . Deferred interest for tax planning Great for regular savings Apply online now at www.bbi.co.im Interest rates are effective from 23rd January 2009, variable and quoted gross % p.a. that is, without any deduction of tax. Monthly interest is also available at 3.30% gross p.a. (AER 3.35%). This account is only available to applicants over the age of 18 and is not available to UK residents. Bradford & Bingley International Limited, International eSavings Unit, PO Box 263, Douglas, Isle of Man IM99 2JJ British Isles. EU Savings Directive rules apply to EU resident depositors. It is the responsibility of the depositor to declare any interest received to their relevant tax authority. AER stands for the Annual Equivalent Rate and illustrates what the interest rate would be if interest was paid to the account once a year. Bradford & Bingley International Limited is registered in the Isle of Man No. 052221C. Registered Office: 30 Ridgeway Street, Douglas, Isle of Man, IM11TA, British Isles. Licensed by the Isle of Man Financial Supervision Commission to take deposits. Fast Facts 22000 Interest available Annually, Monthly or Deferred EXPAT EXPATEXPAT www.expatinvestor.com To register for Expat Investor digital edition, visit the website at
March April 2009