THOUSANDS of wealthy British investors who fear they will lose their life savings in failed Icelandic banks may be given a glimmer of hope, although it is still by no means certain they will get anything back.

Between them they had invested at least £300m in Kaupthing Singer & Friedlander (KSF) on the Isle of Man, through offshore bonds from insurance giants such as Aegon Scottish Equitable, Axa and even Prudential.

The Icelandic bank Kaupthing and its Singer & Friedlander subsidiary were nationalised this month and are likely to be liquidated.

While the chancellor, Alistair Darling, said that all UK savers in Icelandic banks would get their money back, his pledge did not extend to offshore subsidiaries in jurisdictions such as the Isle of Man.

And while those who invested directly into bank accounts from KSF are entitled to up to £50,000 under the Isle of Man’s compensation scheme, many of those who invested through offshore bonds and pension schemes will receive next to nothing.

This is because the insurer, rather than the policyholder, is entitled to claim compensation, which is then distributed among investors.

Their one hope is that they will be able to lodge a claim against their insurer. Aegon Scottish Equitable, which invested in deposit accounts from KSF on behalf of 300 bondholders, is understood to be taking legal advice to determine if it should repay savers.

With the maximum claim for each insurer at a mere £15,000, the 300 Aegon bondholders are likely to receive only £50 each.

Peter Edwards, 60, of Worcester, invested £300,000 of his retirement savings in a deposit account from KSF, through a bond with Aegon Scottish Equitable. He now fears he will lose it all. “It’s worrying — and more so because of the lack of information coming from the bank, or the liquidator. I am in limbo here, and fearing the worst,” he said.

Aegon said: “The liquidation hearing is on October 24, and until that time we are unable to comment further on the position of our customers who have deposits with the bank.”

Aegon’s 300 policyholders are owed £53m. It is thought that Clerical Medical’s figures are roughly the same if slightly lower.

Axa said it has 300 policyholders and £50m invested, while Skandia has £63m invested for about 600 policyholders. Prudential has about 70 policyholders involved. It is trying to find out how much is invested.

Friends Provident refused to disclose how many of its policyholders were owed money or how much, but it has confirmed it invested offshore bond savings in KSF Isle of Man.

Offshore bonds are popular among those who expect to move from a higher-rate tax band to a lower rate on retirement, or to retire to a low-tax country. Bondholders can withdraw up to 5% of the capital invested in the bond with no tax to pay until the entire bond is cashed.

In another twist, offshore bonds can also be held in self-invested personal pensions (Sipps) and Aegon confirmed it had placed retirement savings in KSF on behalf of several Sipp investors.

One investor, writing on the Moneysupermarket forum, stands to lose £60,000 placed by Aegon Scottish Equitable as part of his Sipp.

He wrote: “My only hope is that we are protected as a client account — I am furious that my savings were placed with KSF in the first place.”

One couple from Teesside invested more than £600,000 — the entire proceeds from the sale of their business last year — in an Aegon Scottish Equitable bond which they held in cash and was invested in KSF on the Isle of Man.

Now retired, the couple were drawing a £30,000 yearly income from the account, which also held the money they needed to pay their tax bill in December and fear they will face penalties from Revenue & Customs.

The couple said: “It has been an emotional rollercoaster ride since the bank went under. We thought this investment was safe — or we never would have put all of our money in one place, as we did not want risky investments. We were under the impression it was guaranteed by the insurance company. Now we can’t eat and we can’t sleep. At the age of 52 and 53, we are wondering if we should go out and get jobs.”

The administrator, Price Waterhouse Coopers, said it could not disclose the amount invested in so-called “portfolio accounts”.

Dean Blake of Grant Thornton, the accountant, said: “With the turmoil in equity markets, more clients were asking for their investments to be transferred into cash, and KSF were offering top rates.”

Jason Butler of Bloomsbury Financial Planning said: “We have one client who lost 10% of his portfolio — £200,000 — after investing in KSF on the Isle of Man. The bank had an A1 credit rating from Moody’s. Clearly credit ratings are not worth the paper they are written on.”

The Sunday Times, along with MPs and consumer forums, is being inundated by worried savers, including expatriates and retirees.

Some invested directly in Icelandic banks in Guernsey and Jersey, where there is no compensation scheme.

Others were invested in KSF on the Isle of Man and while £50,000 of their savings were guaranteed by the Manx government before the crisis, because the scheme is not pre-funded by the banks fears are growing it will be years before compensation is paid.

How the protection works

Kaupthing Singer & Friedlander UK: 100% of deposits are guaranteed.

Kaupthing Singer & Friendlander Isle of Man: Individual depositors covered to a maximum of £50,000. However, savers who invested through offshore bonds and Sipps will receive an equal share of £15,000, which is awarded to the insurer named on the account.

Landsbanki Guernsey: No compensation scheme. However, individual depositors have been offered 30% of their savings by administrators.