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| Version 2 | Version 3 |
|---|---|
| Deposit protection plans proposed | Deposit protection plans proposed |
| (30 minutes later) | |
| Chancellor Alistair Darling is expected to propose new measures to protect savers in the event of a bank getting into financial difficulty. | Chancellor Alistair Darling is expected to propose new measures to protect savers in the event of a bank getting into financial difficulty. |
| The plans are intended to increase public confidence in the banking system in the wake of the near collapse of Northern Rock in September last year. | The plans are intended to increase public confidence in the banking system in the wake of the near collapse of Northern Rock in September last year. |
| The threshold for guaranteed deposits could rise from £35,000 to £50,000. | The threshold for guaranteed deposits could rise from £35,000 to £50,000. |
| A consultation period will begin after the proposals are made and any changes will come into effect in the autumn. | A consultation period will begin after the proposals are made and any changes will come into effect in the autumn. |
| The existing Financial Services Compensation Scheme guarantees all deposits up to £35,000. If more than one bank within a group failed, the maximum total amount that could be claimed per person would be £35,000 even though the customer may have separate accounts with different banks in that group British Bankers Association Experts view: Are your savings safe? | The existing Financial Services Compensation Scheme guarantees all deposits up to £35,000. If more than one bank within a group failed, the maximum total amount that could be claimed per person would be £35,000 even though the customer may have separate accounts with different banks in that group British Bankers Association Experts view: Are your savings safe? |
| The chancellor is expected to raise this threshold to £50,000 or even higher. | The chancellor is expected to raise this threshold to £50,000 or even higher. |
| He may also require banks to pay into the scheme up front, so that savers could receive compensation immediately from a prepaid fund. | He may also require banks to pay into the scheme up front, so that savers could receive compensation immediately from a prepaid fund. |
| Need for speed | |
| The current scheme can take weeks or even months before savers get their money back. | The current scheme can take weeks or even months before savers get their money back. |
| The banking industry, however, would prefer to pay compensation when it is needed. | The banking industry, however, would prefer to pay compensation when it is needed. |
| The British Bankers Association (BBA) argue that up front payments would tie up capital and would be an additional drain on liquidity already stretched by the credit crunch. | |
| "It is important that people can get to their cash quickly," Angela Knight, of the BBA, told the Today programme. | |
| She said that banks had always, and would continue, to pick up the cost of the scheme. | |
| She added that there was a very strong banking sector in the UK, but that the repayment of deposits should be given priority if a bank went under. | |
| Do you have savings? Will the Chancellor's proposals allay your fears? Send us your comments and experiences using the form below. | |