What will it mean for Northern Rock depositors?
Depositors’ money is safe. The Bank of England intervention was partly to ensure Northern Rock can operate as normal. It is also hoped the move will reassure Northern Rock customers but if they do decide to withdraw their money Northern Rock should have the funds available. Even in the remote chance that the bank were to go bust, there is a deposit protection facility operated by the Financial Services Compensation Scheme, an independent body set up under the Financial Services Authority, to offer protection to savers for a proportion of their cash. What sort of compensation would I receive? For depositors it is a maximum £31,700 per person; for investments it is a limit of £48,000 and for mortgage advice and arranging it is £48,000 per person. What does it mean for Northern Rock mortgage holders? Not very much. Mortgage holders will still have to keep up their payments. There is a chance the interest rate could rise for those not on a fixed-rate deal but most mortgage rates are rising
