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Northern Rock savings 'safest in country'
19 February 2008
Customers with savings accounts in Northern Rock have been given a guarantee that means that their savings are safer than in any other bank, though one industry source has questioned the legality of this guarantee.
Because the government has nationalised the ailing lender, it has given a 100 per cent guarantee of savings, but this can not be matched by any other bank, rendering it "effectively illegal", according to Rachel Lacey, editor of Moneywise magazine.
While the taxpayer has allegedly been lumbered with up to £100 billion in debt, according to the Daily Telegraph, savers have received guarantees which amount to better protection than what any bank could offer.
"But a question mark is hanging over the guarantee and we're seeing a lot of lawyers now saying that the guarantee is now effectively illegal because it's offering protection that other banks can't match. It will be interesting to see, once this whole process goes through, what happens to the guarantee," said Ms Lacey.
