Monday 1st October 2007
From today, the government will protect the first £35,000 of savings deposited in the case of the collapse of a bank or building society.
Alistair Darling, the Chancellor, unveiled the plans on the back of the Northern Rock crisis and has now said that the government will guarantee deposits of up to £35,000 held in all bank and building society accounts.
He told BBC Radio 4's Today programme that this move was the first stage in a wider process to reform the protection for people's savings.
Mr Darling said that further legislation was also being considered, including possible protection for savings of up to £100,000.
Future reforms under consideration would hopefully see as much of savers' money as possible protected, Mr Darling said, adding that the government would be consulting with the banking industry to formulate new legislation.
Previously only the first £2,000 and 90 per cent of the next £33,000 of savings were guaranteed, but the new rules, which take effect from today, will guarantee £35,000 in the case of the default or collapse of a bank or building society.
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