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Lift on Northern Rock savings guarantee 'welcome'
Following the lifting of Northern Rock's 100 per cent savings guarantee, one money expert has welcomed the return to a more even playing field.
Following the collapse and subsequent government takeover of Northern Rock in 2007, consumers were encouraged to use the bank's savings accounts with the implementation of a 100 per cent guarantee on their money.
Now it has been announced that this is expected to be lifted, Mr Hagger claims that building societies will be able to "compete fair and square" which should "result in an inflow of retail savings balances again before too long".
He added: "There's no doubt that building societies suffered in trying to compete against the 100 per cent savings guarantee."
"Statistics from the Building Societies Association reveal a reduction in total balances of £1 billion in 2009 for the mutual sector compared with an increase of £19 billion in 2008."
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Following the collapse and subsequent government takeover of Northern Rock in 2007, consumers were encouraged to use the bank's savings accounts with the implementation of a 100 per cent guarantee on their money.
Now it has been announced that this is expected to be lifted, Mr Hagger claims that building societies will be able to "compete fair and square" which should "result in an inflow of retail savings balances again before too long".
He added: "There's no doubt that building societies suffered in trying to compete against the 100 per cent savings guarantee."
"Statistics from the Building Societies Association reveal a reduction in total balances of £1 billion in 2009 for the mutual sector compared with an increase of £19 billion in 2008."
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Published: 11/02/2010
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