Savings to be Protected up to £35,000
| Published: 4th October 2007 10:30 |
News comment. Mon 1 October
New safety net can protect £315,000 of top rate savings - Though confusing rules mean many people will get it wrong
The Chancellor, Alistair Darling, has announced that bank and building society savings will be fully protected up to £35,000, with immediate effect. Martin Lewis, creator of consumer revenge site MoneySavingExpert.com, comments:
How to save £315,000 in perfect safety
"Finally, a sensible move. The Government's hands are tied, but in the short-term this surety is very important. In the past, to get 100% safety, the rule was ‘don't put more than £2,000 in any one bank' - something that wasn't feasible for most people with retirement or house sale profit savings. Now that the limit is £35,000, life's much easier. There are now nine different banks with instant access accounts paying more than 6.2%, meaning spread your money and you can get a very good return, in perfect safety, on up to £315,000!
Confusing rules mean many will get it wrong
For a full guide to which banks have their own protection see www.moneysavingexpert.com/safesavings"The compensation system is still very confusing, and if you really want to spread your accounts for safety there's a massive trap to avoid. The rule is you're protected per financial institution, not per account, but what defines an institution depends on each bank's licence. For example, massive banking conglomerate HBOS - incorporating Halifax, the Bank of Scotland, the AA & Birmingham Midshires and others - is one bank, so you only get one set of protection. Yet the RBS group is split into different banks, so put money into sister banks NatWest and RBS and it's all protected."
