Northern Rock forced to cut savings accounts

Just a year ago Northern Rock was being branded the victim of the first run on a British bank in almost 150 years, and customers were flocking to get to the bank and take out their cash amidst rumours that the bank was on the verge of collapse. However, since this time the bank has been nationalised and since falling into government hands now offers a 100% guarantee on savings deposits for customers – a guarantee that had previously only been available on National Savings & Investments. Read more

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Danger of only investing in your home

We are being warned that we could be setting ourselves up for a fall by investing almost all of our money into a single property.

That is according to a report which states that almost two-thirds of us are running the risk of financial ruin by investing too heavily in a single asset.

Researchers at Durham University have discovered that as many as 62 per cent of us invest the majority of our money in a house and could face real difficulties if a housing market drop, like that seen in the late 1980s, were to take place.

“This study really draws attention to the precarious position of the majority of English homeowners’ savings,” said Susan Smith from the university.

“While many would think it strange to invest everything they have into one particular company, to all intents and purposes more than seven million people in England are doing just this by ‘banking on housing’.

“In fact, they are investing almost everything they have into just one building, in one neighbourhood, in one town, in one region, despite the hindsight of a recent housing market collapse,” she added.

The research found that 30 per cent of people take out a mortgage but do not see their home as a way of storing and accumulating wealth.

This apparent lack of vision when it comes to the housing market is even more alarming when you realise that 59 per cent have no other savings or investments to fall back on.

Homeowners are being advised to ensure that they have some secondary savings.

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