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Expatriate Insurance News: Banks pull out of offshore savings market

Expatriate consumers may find that their choice of savings account becomes increasingly restricted as financial institutions pull out of the offshore market.

Irish Permanent announced last week that it is ceasing operation on the Isle of Man, while Northern Rock revealed it is shutting down on Guernsey.

Now the UK’s second-largest building society, the Yorkshire, is considering whether to leave the offshore market, the Telegraph reported.

These withdrawals are down to the failure of the Icelandic banks, which were heavily involved in the offshore savings market, leaving potential investors less willing to put their money in these accounts, the newspaper said.

Another factor is the impact of the financial crisis on banks’ offshore operations, as institutions look to cut back on some parts of their business.

Rachel Thrussell of Moneyfacts told the paper that there is no benefit in rate terms from going offshore unless consumers need to.

"Now the trend has started, we’re bound to see more getting out of the offshore market – to the disappointment of savers who rely on these accounts and who have no option but to go offshore," she added.

Northern Rock Guernsey will shut its doors on September 2nd.

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