London Daily

Focus on the big picture.
Thursday, Oct 01, 2026

Investors may pay for short-notice withdrawals

Investors may pay for short-notice withdrawals

Investors may have to accept a discount on the value of their investments if they want to take their money out at short notice, according to new proposals from banking regulators.

The suggestion comes after some funds ran into trouble and barred investors from withdrawing their money.

Alternatively investors could be required to give more notice that they want to take their investment out.

The proposals are part of the Bank of England's financial stability report.

Together with the Financial Conduct Authority, the Bank is recommending the changes as a way to reduce risk in the system.


Long overdue

Earlier this year funds managed by Neil Woodford blocked savers from taking out their money after the funds got into difficulty. Then this month M&G froze withdrawals from its property portfolio fund.

The problem is that the kind of assets they invest in, such as office blocks and retail sites, take more than a day to sell. Investments in small companies can be illiquid - hard to sell quickly - too. But investors want their money back instantly.

The current system creates an incentive for investors to try to get to the front of any queue of people wanting to withdraw money - much like a run on a bank. According to the Bank of England, this has the "potential to cause systemic risk."

Reform of a system that treats investments in office blocks as if they were a cash machine is considered long overdue but it remains to be seen just how much a hit savers will need to take if they want their money quickly - or how long they will have to agree to lock up their money.


Loan concerns

The Bank's broader look at the risks facing the financial system explored whether the UK's big banks and the Nationwide Building Society were resilient enough to withstand potential shocks.

The institutions were subjected to a regular "stress test" which imagines a world in which unemployment rises to over 9%, interest rates rise by 3% from current levels and house prices fall by a third.

It concluded that the UK's major banks - HSBC, Barclays, Lloyds Banking Group, Royal Bank of Scotland, Standard Chartered, Santander UK - and the Nationwide Building Society were in a position to be able to withstand this impact and therefore continue to be able to lend.

However, the Bank of England said it was concerned that some banks were increasing the number of risky loans to companies with already high levels of debt.

Newsletter

Related Articles

0:00
0:00
Close
Southwest England Faces Flood Alerts After Heavy Autumn Storms
UK Expands Funding for Rapid Electric Vehicle Charging Infrastructure
Welsh Government Approves Funding to Upgrade South Wales Transport
Northern Ireland Tensions Rise as Orange Order Rejects Drumcree Compromise
NHS Leaders Back Early Design of Proposed National Care Service
More Than One-Third of Regional UK Universities Face Financial Deficits
UK Current Account Deficit Narrows as Cross-Border Financial Flows Remain Strong
Bank of England and FCA Issue New Rules for Stablecoins and Digital Assets
MI5 Warns UK Universities Over Research Links With Chinese Institutions
UK Energy Price Cap Rises 4% as Electricity VAT Is Temporarily Suspended
Equity Calls for UK Personality Rights to Protect Performers From AI Replication
OpenAI Pauses Advanced Model Training Following Safety Concerns
Scottish Government Proposes Replacing 32 Councils With Larger Regional Authorities
Ofgem Raises UK Household Energy Price Cap by 4% From October
UK Counter-Terrorism Police Continue Investigation After Five Arrests Near RAF Fairford
OECD Cuts UK 2027 Growth Forecast to 1%
Labour Says State Pension Triple Lock Remains Protected Through Current Parliament
Andy Burnham Pledges National Care Service With Free Social Care in England
Six Flags Permanently Shuts Landmark X2 Roller Coaster Following Safety Scandals
Metropolitan Police Rule Out Terrorism in Golders Green Stabbing Investigation
Lithium-Ion Battery Identified as Cause of Fatal Merseyside House Fire
UK Department Rejects New Sea Use Framework Due to Stakeholder Fatigue
Major Thames Water Pipe Burst Causes School Closures in London
Aldi Commits £900 Million to Expand UK Supermarket Network
Scottish Affairs Committee Warns Skills Shortages Threaten Defence Sector Expansion
Parliamentary Committee Warns Northern Ireland Budget Deadlock is Stalling Economic Growth
NHS Hospitals in England Face Severe Shortages of Essential Medications
Home Secretary Signals Major Overhaul of UK Immigration and Leave to Remain Policies
Chancellor Promises New Job Schemes Alongside Strict Fiscal Discipline
Energy Secretary Proposes Taxpayer-Funded Green Transition and National Electricity Grid
UK Government to Renationalise Avanti West Coast Railway Franchise in March
Prime Minister Andy Burnham Pledges Major Social Care and Infrastructure Reforms
Five Suspects Released on Bail Following Alleged Bomb Plot Near RAF Fairford
UK Diesel Prices Hit Record High of 199p Per Litre
Transport for Wales and Network Rail Complete Electrification of South Wales Metro
Defra Expands Incentives for Sustainable Farming and Biodiversity in England
Northern Ireland Executive Approves Funding Package to Resolve Public Sector Pay Disputes
Universities UK Warns of Financial Insolvency Risks for Higher Education Institutions
UK Prisons Activate Emergency Protocols to Manage Capacity Pressures
UK Government Establishes New Safety Standards for Frontier AI Models
Home Office Tightens Skilled Worker Visa Requirements and Dependent Rules
Ministry of Defence Restructures Royal Navy Frigate Procurement to Prevent Overruns
UK Government Mandates New Housing Targets to Address National Shortage
UK and Scottish Governments Reach Agreement on North Sea Energy Transition
NHS Launches Digital Overhaul to Reduce Surgical Backlogs in England
Bank of England Holds Interest Rates as Service Sector Inflation Persists
UK Chancellor Announces Fiscal Consolidation Measures to Stabilize National Debt
RNLI Chief Executive Condemns Misinformation and Abuse Targeting Volunteer Crews
Metropolitan Police Charge Swindon Man with Assisting Foreign Intelligence Services
British Intelligence Report Warns Environmental Collapse Threatens Global Defense Infrastructure
×