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Govt ends 100% guarantee for Northern Rock savers

The Government’s 100 per cent guarantee for Northern Rock customers is to end, and savers will now be protected by the Financial Services Compensation Scheme.

The change means that any new accounts opened will now be covered by the FSCS, which provides protection of up to £50,000 per person. Customers with variable rate accounts will also be covered under the FSCS.

Existing fixed term accounts will retain the Government guarantee for the remaining term of the product and existing variable rate accounts will retain the guarantee for a further three months until 24 May 2010.

Northern Rock says it has written to all its savings customers to make them aware of the changes.

Chief executive Gary Hoffman says: “We welcome the Government’s decision to release the savings guarantee, following an appropriate period of notice for our customers.  

“This is another positive step in the right direction and the decision reflects our good progress and the strong capital position of Northern Rock. The Company is returning to a level playing field and our savers will enjoy exactly the same level of protection, under FSCS, as customers of other UK banks and building societies.”

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