Northern Rock causes saver caution

Savers are being far more cautious with the money that they put into savings following the recent credit squeeze and subsequent Northern Rock scare, price comparison site Peopleschampion.com has revealed.

Conducting polls of people standing in the queues outside Northern Rock, the website found that customers were taking their savings to larger institutions such as the clearing banks – Lloyds TSB, the Royal Bank of Scotland, Barclays and Halifax and Bank of Scotland (HBOS).

This is in spite of the fact that the Bank of England has assured savers that their money is 100 per cent guaranteed in the event of a bank collapse. The savers that were surveyed were unanimous in their stance: safety now comes before higher interest rates.

Jim Spowart, a spokesman for the website, said: “Many people – especially older people – are being much more cautious with their money. They have been bitten first by the pension crisis, and now Northern Rock, so instead of going instinctively for the highest return, they are looking more at safer havens where they know their money is secure.”

According to Simon Ward, a top economist at asset management firm New Star, the Bank of England’s last resort support to Northern Rock may well have amounted to as much as £2.9 billion.

Tags: clearing banks, scotland, rock, pension crisis, savers, scare, Website, Many people