Northern Rock loses 100 per cent savings guarantee

Category: Savings
Date: 2/24/2010

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.

Find the best savings account for you - Compare fixed rate bonds or take a look at our best sellers chart

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at anytime.