Friday the 13th saw two newspaper articles, in the Independent and the Times, announcing the launch of a One4All Smart Planner Christmas savings product. I can’t find any specific details about the product on the One4All website, so these are some initial thoughts on the proposal.
First of all, as I’ve said before, Christmas savings clubs set up by private companies are a bad idea. Essentially, you’re giving them money for nothing for a period of time, hoping to get it back before Christmas. If they go bust between now and then, you’re going to end up as an unsecured creditor and at the back of the line waiting for the unlikely event that you’ll get your money back.
Just because Brian Lenihan, the Minister for Finance and guarantor for most savings products in the country at the moment (from the banks), launched this product it doesn’t mean that there is any particular safety or guarantee for this particular savings scheme.
Some people may remember the huge Farepak Christmas savings club collapse in the UK in 2005 where savers in a Christmas club were out of pocket by nearly £38m. Today, 4 years later, savers still have to see any of their money as far as I can find out.
It will be interesting to see what safeguards will be part of this One4All scheme. Make sure you read all their terms and conditions fully before you get involved. When I find out any more, I’ll write more here.