Kaupthing Isle of Man savers remain in limbo

Around 8,000 savers who put cash into Isle of Man-based Kaupthing Singer & Friedlander are still waiting for resolution over the £821 million they deposited with the Icelandic bank with delays expected in a court case on the payment of compensation.

Savers are having to wait for negotiations between the UK, Manx and Icelandic governments to conclude before getting any cash back. A court case which would decide today whether to wind up the bank and trigger compensation payouts was expected to be delayed. 

The island’s parliament, the Tynwald, last night approved for £150 million to be pumped into the Manx compensation scheme so savers can be paid back quickly when the scheme kicks in. Savers will be able to recover up to £50,000 from the Isle of Man depositors’ compensation scheme but many had far more than this with the bank.

In extreme cases, some savers fear being made homeless after the bank was caught in the Icelandic banking crisis. 

Nurse Dawn Richardson and her 17-year-old daughter will be made homeless by the collapse of Kaupthing. Southampton-based Richardson has been living with family since she was forced to sell her £247,000 home in February when she got divorced.  

Richardson deposited her £90,000 share of the sale into Kaupthing in March with the aim of buying a home for her and her daughter in the New Year.

‘I thought this [money] will give me a new start,’ said 52-year-old Richardson, who was also retiring from the National Health Services due to ill health. ‘I will have to go to the council and beg poverty –something I’ve never imagined in my worst nightmares.’ 

The Isle of Man was Richardson’s first choice because of its security and she needed an offshore account for her long-term plan to retire abroad. ‘Because it was the Isle of Man I thought nothing could go wrong,' she said. 

The collapse of Kaupthing has demolished engineer Les Spennett’s plan to convert a water mill in Brittany, France into a home and pay for his retirement by selling electricity back to the national grid.  

Spennett was last month forced to open an offshore account with Kaupthing because he could not supply a postal address for UK or French banks after selling his £1 million London home.