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How Are Your Savings?

November 24, 2008 by admin  
Filed under Banking

1 Comment

Most of us struggle to put aside as much money as we can into savings, especially in the current financial climate, and we all want to know that our savings are as safe as possible. However, with the financial turmoil being experienced by the UK and other major nations around the world consumers are becoming more and more jittery about just how safe their money really is.

There is good news for those that have savings with the nationalised Northern Rock and National Savings & Investments, which both offer a 100% guarantee on all savings. Those with UK branches of Irish banks and Post Office can also enjoy this increased safety net thanks to recent changes in the Irish banking sector. However, up until recently those with savings with other financial institutions only had the first £35,000 of their savings guaranteed 100%.

The Chancellor of the Exchequer, Alistair Darling, has recently announced, however, that the safety net was being increase, and from this week savers will have the first £50,000 of their savings guaranteed 100%. The Financial Services Authority is also discussing whether this safety net should be increased even further, so the 100% guarantee could apply to an even higher level of savings in the near future.

The collapse of the Icelandic bank Landsbanki has made the headlines this week, and many consumers that rushed to open accounts with the Internet based Icesave when it was offering headline interest rates expressed concern over what would happen with their savings. However, following the alleged failure of the Icelandic government to fulfil obligations with regards to compensating those with savings in the Icelandic bank the UK Chancellor, Alistair Darling, has stated that the savings of UK consumers that had money in Icesave will be covered 100%, so those with more than the £50,000 threshold will not lose any money.

Following the increased guarantee on the first £50,000 of savings, an official from the Financial Services Authority said: ‘There has been extensive debate about the compensation levels. In the interests of providing clarity over the minimum level for the long term we have now decided to implement the move to a £50,000 limit from Tuesday. This change ties in with the introduction of the Government’s Banking Bill in Parliament which is due next week, and is also appropriate given the consolidation that has taken place in the banking sector. In addition, the Chancellor has made clear that the Authorities will do whatever is necessary to maintain financial stability and protect depositors.’

However, despite these actions to try and increase the level of security amongst UK savers recent research has indicated that around one fifth of savers in the UK still don’t think that their money is safe in UK savings accounts. Many have said that they are looking to withdraw some or all of their money in the coming month, and this could spell even worse news for struggling banks and building societies, many of which have been relying on saver deposits to fund their lending operations.

Tags: Icelandic government, net, savings, concern, northern, savings accounts, headline, climate

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Comments

One Response to “How Are Your Savings?”
  1. james wright says:
    January 31, 2009 at 10:08 am

    Recently myu two with profits bonds matured: terminal bonus not paid. return on my savings is now 0.02%.

    Financial institutions used the cloak of respectablity to con billions of pounds from the masses, yet no one has been brought to account.

    For me, bank’s have decended into the gutter in persuit of profit at the expense of savers and shareholders.

    dishonesty prsonified.

    james wright

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