Coping with the credit crunch Your savings
Which? Archive
This article, Coping with the credit crunch, was last updated on 10 March 2010 and is now out of date and held in our online archive for reference. Explore our latest Money articles.
Should I worry about my savings?
Government guarantees mean your savings will be safe
Northern Rock savers are now protected by government funds so arguably this is one of the safest places to save during the credit crunch.
Other UK banks are covered by the Financial Services Compensation Scheme (FSCS). This means that in the event of a bank being declared insolvent, savers would get back all of their first £50,000 back in compensation. Be careful though - with some banking groups you only have up £50,000 cover on savings split across different group companies. Check our guide to for more detail.
If you want to move your money
If you have more than £50,000 saved with a bank or building society and would feel safer splitting this between two or three to stay within the FSCS threshold, you should look at our reviews of savings accounts for the latest Which? Best Rate, but bear in mind protection may not apply to non-UK companies.
What is the situation with cash Isas?
Cash and Tessa-only Isas have the same protection as savings accounts under the Financial Services Compensation Scheme as detailed above. Contribution limits mean people are also much less likely to have more than £50,000 in an Isa.
Check out our reviews of cash Isas for current Which? Best Rates.
Savings rates
Recent cuts in the Bank of England's base rate to just 0.5% have been bad news for savers as the rates paid on savings accounts have plummeted.
There are still good deals out there, although anyone relying on interest from savings for the majority of their income is likely to have seen their income drop, unless they put their money in fixed-rate accounts while interest rates were higher last year.
And you need to be careful, because some deals will seek to tie you in for a number of months or even years. Others will pull you in with an attractive headline rate, only to drop it again a few months later. Check out the Which? Best Rate savings accounts and the Best Rate cash Isa deals - and switch your savings to a more competitive provider if you need to.
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