Icesave: It is the smaller saver who stands to lose the most
But today for the first time, ordinary deposit holders, who have simply put their money in the bank, woke up to find they could no longer get their hands on their money – and more worryingly still, there are question marks over whether they will see this cash again.
So will the FSCS step in to help if Iceland is unable to meet its statutory obligations? At present it doesn't look like it. A spokeswoman for the FSCS said: "Icesave is not a British bank. We are obliged to top up the compensation to £50,000 but only above £16,000."
In other words if you have £50,000 in the Icesave – and Iceland's compensation scheme does not pay out – at least you will get £34,000 refunded. But if you have £10,000 or £15,000 in the bank you lose the lot.