Simon Read: What if your savings are with a foreign bank

The Cyprus crisis sent out shockwaves to UK savers. The most worried have been those with deposits with banks based on the islands. Some 50,000 people have savings with Bank of Cyprus, but the bank was quick to reassure them of the safety of their cash, despite the crisis.

In a statement it said: "Bank of Cyprus UK is a separately capitalised UK incorporated bank, is subject to UK financial regulation, and eligible depositors are protected by the UK's Financial Services Compensation Scheme."

But Laiki Bank, which has four UK branches, is not part of the FSCS. Instead deposits are protected under the Cyprus Deposit Protection Scheme, which effectively relies on the backing of the Cyprus government. That could be enough to pursuade UK savers to switch.

Those with savings in other parts of Europe should also be worried, according to the finance expert Brian Dennehy. "An economy in recession, the burden of unsustainable debts, a flakey banking system, and the threat to sovereignty by EU and bullying, are key problems shared by many countries," he warns, citing Italy, Spain and France as at risk areas.

Is that scaremongering? I tend to think it's food for thought. One thing's for sure, the euro pain is far from over. So the problem is finding a safe haven for your savings.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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