Rescue hope for Presbyterian savers
Published 20/10/2010 | 16:12
There are hopes that the Chancellor's pledge of a £200 million rescue package for the crisis-hit Presbyterian Mutual Society (PMS) could ease the plight of its thousands of savers.
Former Moderator of the Presbyterian Church in Ireland Dr Stafford Carson welcomed the announcement but said more details were needed on how individual savers would be dealt with.
The PMS went into administration in 2008 in the wake of the international banking crisis, leaving nearly 10,000 people unable to access their savings. First Minister Peter Robinson and Deputy First Minister Martin McGuinness have led long-running talks on how to assist PMS savers, who were not covered by the Government guarantee scheme that protected other financial institutions.
The political leaders established a ministerial working group on the issue and proposed a combination of a cash fund and a multimillion-pound loan to unlock the PMS crisis.
Unveiling his Spending Review in the House of Commons, Chancellor George Osborne said: "In Northern Ireland the collapse of the Presbyterian Mutual Society has indeed caused great hardship, and people have been left without their money for far too long.
"I confirm today that we will provide the Northern Ireland Executive with £25 million in cash, and a £175 million loan to help those who have lost their life savings."
The PMS was a separate legal entity from the church, but a House of Commons Treasury Committee report found that: "Its membership was limited to members of the Church. Six of its directors were current or former ministers. It appears that for some members the affiliation was so close as to warrant no distinction."
Savers who spoke of their experience said they were comforted by the Church's link to the PMS and were shocked by the organisation's sudden collapse. And while those with larger savings are in line to get 12% of their money back, those owed under £20,000 received nothing.
The PMS originally hit problems when members withdrew millions in 2008 after the international banking crisis hit. The Society was not covered by the Government guarantee scheme. The Presbyterian Church had previously offered to contribute £1 million to the proposed hardship fund.
Dr Carson said: "Hopefully today's announcement will bring clarity to the discussions of the Ministerial Working Group. We urge them now to work without delay towards a just and fair resolution for everyone involved and bring to an end the anxiety and worry suffered by so many."