London Daily

Focus on the big picture.
Friday, Sep 11, 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
English Councils to Gain Power to Introduce Tourist Taxes by 2028
Kemi Badenoch Reshuffles Conservative Shadow Cabinet
Firefighters Make Progress Containing Major Wildfires in South Wales
John Lewis Partnership Reports £124 Million Loss
Study Says UK AI Data Centres Will Create Only a Quarter of Forecast Jobs
UK Government Considers Higher Industrial Water Prices Amid Supply Pressures
Andy Burnham Holds First Call With Donald Trump as UK Prime Minister
NHS Records Busiest Summer on Record as Heatwaves Drive Hospital Admissions
Home Secretary Orders Police Crackdown on Far-Right Anti-Migrant Vigilantes
UK Supreme Court Rules Northern Ireland Religious Education Curriculum Breaches Human Rights Standards
Markets Price in Four Bank of England Rate Rises by Next Summer
House of Commons Prepares Free Vote on Assisted Dying Bill
UK Government Bans Trade With Israeli Settlements in Occupied Territories
UK Economy Grows 0.4% in July as Artificial Intelligence Investment Supports Expansion
Andy Burnham Becomes UK Prime Minister After Keir Starmer Resigns
John Lewis Partnership Loss Widens to £124 Million
UK Government to Put White Working-Class Social Mobility at Centre of Equality Policy
McLaren Plans £450 Million Technology Investment Creating 1,000 UK Jobs
UK Chancellor Faces Calls for Wealth Taxes and Public Ownership in Autumn Budget
English Mayors to Gain Powers to Impose Uncapped Overnight Tourist Taxes
JPMorgan’s Jamie Dimon Warns UK Government Against Bank Windfall Taxes
UK Air Traffic Control Outage Cancels More Than 2,000 Flights
UK Imposes Trade Ban on Israeli Settlements in the West Bank
UK Borrowing Costs Surge as Middle East Tensions Push Long-Term Gilt Yields to Highest Since 1998
Buckingham Palace Says Prince Harry and Meghan Will Not Resume Official Royal Duties
UK Treasury Faces Calls to Scrap £100,000 Childcare Support Threshold
Trades Union Congress Urges Labour Government to Rewrite Migration Policy
Riot Police Deployed After Anti-Migrant Protests Turn Violent in Portsmouth
UK Considers Replacing Some Disability Cash Payments With Direct Services
JPMorgan’s Jamie Dimon Warns UK Chancellor Against Higher Banking Taxes
UK Announces New Sanctions Targeting Israeli Settlements in West Bank
Metropolitan Police Investigate Alleged Illegal Donations to Reform UK
UK Charges Wiltshire Man With Assisting Russian Intelligence
UK Orders Urgent Review After Air Traffic Failure Cancels More Than 2,000 Flights
Merz Rebukes AfD Expansion in Saxony-Anhalt
King Charles Confirms Prince Harry and Meghan Will Remain Private Citizens
Labour Selects Former Child Refugee for By-Election in Keir Starmer’s Former Seat
Foreign Private Equity Accelerates Takeovers of London-Listed Industrial Companies
NHS Maternity Care Faces Scrutiny Over Support for Mothers After Caesarean Births
BBC Warns Staff Strikes Are Likely Amid Job Cuts and Programme Cancellations
English Housing Affordability Improves to Best Level in More Than a Decade
UK Health Commission Proposes Framework for Wider AI Adoption Across NHS
Labour Faces Pressure for Wealth Tax Ahead of Autumn Budget
Metropolitan Police Open Criminal Investigation Into Alleged Foreign Donations to Reform UK
UK Police Deploy Riot Officers After Anti-Immigration Unrest in Portsmouth and Dover
UK Defends Sanctions on Israeli Settlements Despite Diplomatic Retaliation
UK Air Traffic Control Failure Cancels More Than 1,000 Flights and Disrupts 65,000 Passengers
Compass Urges £10 Million Wealth Tax and Public Ownership Ahead of UK Autumn Budget
UK Government’s Devolution Plans Face House of Lords Scrutiny
Maldives Seeks New Chagos Sovereignty Talks With UK Prime Minister Andy Burnham
×