How to protect your cash in case there’s another crash

TEN years ago, in London’s rather joyless Canary Wharf, an ordinary morning was punctuated by flocks of bankers looking dazed and wandering around clutching papers and pot plants in cardboard boxes.

Back then I was chatting to a consumer rights organisation and happened to glance over to the big glass meeting rooms over the docks, where the entire workforce of financial colossus Lehman Brothers was in a meeting.

It was mid-September and the firm was filing for bankruptcy. The financial crisis was about to begin.

Investors and economists were so certain that a financial collapse on this scale could not occur, there was a huge sense of shock when it did, and of course, we all paid the price for the bankers’ arrogance.

A decade on, some parts of the economy are still looking a bit rocky.

So if you’re worried about dark financial clouds on the horizon, what can you do to protect your cash?

KEEP IT BRITISH

A DECADE ago, there was a minicraze for putting your savings in to Icelandic banks.

People got a rude surprise when the banks packed in and the money vanished.

The Government stepped in on that occasion, but it was a reminder to people that investing money off-shore can be a risky business. Every year I see people lured into buying land in foreign countries (land banking), property investment portfolios and other high-risk ventures.

Some are legit, some are outright cons. But if you take your cash off-shore, you are taking a very high risk if things go wrong.

SAVINGS AND INVESTMENTS

WHICH leads us to the Financial Services Compensation Scheme (FSCS).

The FSCS is a free service, like an ombudsman but for regulated (UK-based) financial firms that go bust.

They pay compensation when this happens, but it isn’t a free money scheme. If you have a PPI claim against a bankrupt firm, for example, you still have to make a formal complaint.

The maximum amount it can pay varies depending on what it is you’re claiming for.

It doesn’t cover credit companies like Wonga though.

DEBTS

IT WOULD be lovely if debts vanished when a firm goes bust, but I’m afraid they live on. Your debt will be passed to another company, but if it treats you unfairly, increases charges or puts you under undue pressure to pay up you have to right to pursue a complaint.

You’ll also be able to go to the Financial Ombudsman if there’s a problem with the company that takes over your

debt.

PENSIONS

I’VE seen some terribly managed pensions lately where commission and charges have eaten away at the money invested including one case where the plan was whittled down to just £3.50.

Many of us don’t feel we can question our pension providers – or we might have been pressured in to taking out a plan that’s complicated or not suitable.

Get educated about your pension plan. Ask the provider for information and get them to explain in plain English how it works.

If you don’t know how to get started, The Pensions Advisory Service can help you out, plain-English style and the Pensions Ombudsman is there to sort out complaints for free.

■ Worried that your money is being misused? Get in touch via resolver.co.uk or email yourstories@resolver.co.uk