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Northern Rock loses 100 per cent savings guarantee

Northern Rock loses 100 per cent savings guarantee

Category: Savings

Updated: 24/02/2010
First Published: 24/02/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Customers of the nationalised Northern Rock Bank will soon lose their 100 per cent guarantee that has covered their savings.

The entirety of savers' money at the bank has been covered since late 2007, when the Government acted to reassure customers against a backdrop of queues outside Northern Rock branches.

Those with fixed term accounts will retain the guarantee for the remaining term of the product, while customer with variable rate products will see the cover expire in three months' time, on 24 May.

Northern Rock customers will still be covered by the Financial Services Compensation Scheme, which provides protection up to £50,000 per person, the same as for other banks and building societies.

The nationalised provider welcomed the decision, saying it reflected the bank's good progress and ensures Northern Rock can compete on the same terms as other banks and building societies.

The bank has been split into two parts, with customer deposits held in Northern Rock PLC – the arm which the Government intends to sell off in due course.

The bank's old mortgages and bad debts are held in Northern Rock Asset management, which will eventually be wound down.

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