UK Deposit Guarantee to rise to £50K

Britain’s financial watchdog ( FSA) is expected to unveil plans next week to raise protection for savers in banks and building societies to £50,000 as the UK government sought to reassure the public that it would do “whatever is necessary” to tackle the impact of the global credit crisis.
The current UK £35,000 ceiling covers 96% of deposits and an increase to £50,000 would leave only 2% of accounts outside the scheme.

The Irish government yesterday guaranteed all deposits at six of the country’s key lending institutions, but Gordon Brown is wary of matching the Irish move, fearing the government simply does not have the cash to back up such a pledge. Maybe that worry should have also been considered by the Irish government.

The Irish guarantee is going through legislation today – but it is widely seen to be in breach of EU competition law. There are reports of lot’s of savers moving money in the UK into Post Office accounts – which are backed by Bank of Ireland.

Gordon Brown was asked if he would follow the Irish example- Brown said “Wherever there has been a problem we have taken action. Let us remember, the Irish are dealing with taxpayers’ money. We have got to do what is right and also what is reasonable.”