Newsflash: Northern Rock to lose 100% savings guarantee

It's been announced that the Government's 100% guarantee of the bank's deposits is to be removed with effect from 24th May 2010. Therefore in future savers at Northern Rock may not get all their money back should the worst happen and the bank goes under.

However Northern Rock savers need not panic because, along with savers at any other bank, the Financial Services Compensation Scheme (FSCS) will cover them for £50,000 or £100,000 for joint accounts if the bank goes bust. All that's happened is that the playing field for both banks and savers has been leveled again.

This raises the interesting questions of how safe our banks are and what compensation if any we would be entitled to if they go bust. A topic which I will cover soon.....