Martin Lewis comments on what’s next for its savers

Taxpayer-owned Northern Rock has confirmed it is likely to drop its 100% savings guarantee. It says the matter is up for review but also states the full guarantee was never supposed to last forever.

Normally the first £50,000 per person held in UK financial institutions is protected. Following Northern Rock’s collapse in 2007, the government had promised to protect 100% of the money that anyone saved with it.
For full details on how savings are protected, read www.moneysavingexpert.com/safesavings
Martin Lewis, creator of MoneySavingExpert.com, comments:

“There is no panic here, though if the 100% guarantee disappears, this is something Northern Rock savers should be aware of, just as savers in any bank should fully understand the safety of their cash.

“The real protection savers have, even without the full guarantee, is that it would be ludicrous for the Government to flog this bank to a company that would allow it to go bust. If it did, it would call into question our entire method of government.

“Having said that, for belt, braces and buckles, the rule is always if you’re saving over £50,000, spread it around institutions.

“Those who put their money in Northern Rock purely for 100% safety’s sake, and sacrificed getting a decent interest rate, should take notice.

“If the guarantee disappears, it is worth reviewing your rate and seeing if you can get more elsewhere by spreading cash, so that you’re not over the £50,000 limit anywhere.”
 
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