Increased safety for money of Post Office savers

As a result of changes to the Irish banking system some savers in the UK, including those with Post Office savings accounts, will see their savings guarantee almost double compared to that of savers with other financial institutions. Post Office savers will be offered a safety net of up to almost £80,000 on their savings. Also included will be savers that have money with UK branches of Irish banks, such as Anglo-Irish Bank and the Bank of Ireland.

The increased safety net has come about as a result of the Irish government increasing its own guarantee and extending it to the first €100,000 of savers’ money, which equates to nearly £80,000 at the current exchange rates. The Post Office savings scheme is run by the Bank of Ireland, and this is why savers with the Post Office will also benefit from the changes.

In the past the Irish compensation scheme only covered the first €20,000 worth of savings. For Post Office savers this would have meant claiming this amount in Ireland and then making up the remainder up to the UK compensation limit of £35,000 through the Financial Services Compensation Scheme. However, they will now be covered up to nearly £80,000 whereas savers with other non-Irish financial institutions will only have a guarantee up to £35,000 under UK regulations.

The Irish Minister for Finance stated: ‘The Central Bank and Financial Regulator have stressed the soundness and stability of the Irish financial system. This measure provides additional reassurance to depositors in Ireland that their savings are safe.’

In the meantime, Chancellor of the Exchequer, Alistair Darling, has proposed changing regulations in the UK and increasing the guarantee from £35,000 to the first £50,000 by the end of the year.

Tags: savings, Alistair Darling, chancellor of the exchequer, meantime, Anglo