Savers still looking for safe place for savings

There is further evidence that consumers in the UK are still desperately looking for a safe place to put their savings amidst the chaos that has taken over in the financial markets. Problems such as the nationalisation of Bradford & Bingley, the Lloyds TSB takeover of HBOS, and the collapse of Icelandic banks has left many consumers confused and nervous about their savings.

Over recent weeks many savers have flocked to the now nationalised Northern Rock in a bid to put their savings in a place where there is a 100% guarantee in place. Irish banks have also been inundated with deposits and enquiries since the government announced that it was increasing the safety net on savings with Irish banks, which includes the Post Office.

Another recent report claims that National Savings & Investments has been forced to cut some of its rates after being inundated with people wanting to deposit savings. This is another financial institution that offers the 100% guarantee. Some of the rates on its savings accounts have been reduced by 0.20% as a result of the high level of deposits.

An official from NS&I said: ‘In recent weeks NS&I has observed an increase in sales volumes and has taken the decision to reduce rates. The changes aim to support NS&I in meeting its annual net financing remit, maintain a consistent level of market share and provide a positive savings experience for its customers.’