Northern Rock Guarantee?

count_arthur

I was just browsing the Northern Rock website to check on the details of the 100% Government guarantee on all savings referred to by Martin under "Are your savings safe?"
As far as I could tell this guarantee no longer exists on the website, but I did find this under "Legal Notices"

Financial Services Compensation Scheme (FSCS)
Northern Rock is a member of the Financial Services Compensation Scheme (FSCS) established under the Financial Services and Markets Act 2000.You may be entitled to compensation from the Scheme if we cannot meet our obligations. This depends on the type of business and the circumstances of the claim.
Depositors
On 7 October 2008 the Financial Services Authority (FSA) increased the limit of Financial Service Compensation Scheme (FSCS) cover for deposits to 100% of the first £50,000 of each depositor's claim. Most depositors, including individuals and small firms are covered. The Scheme limit relates to each depositor for their combined deposits held with Northern Rock and not for each Account. Further details of the Scheme are available on request.
© Northern Rock plc. 2009

Has the 100% guarantee now been quietly dropped?

Obukit

When people say that Northern Rock is 100% backed by government they mean that the government owns Northern Rock. As such, the company is almost certain not to go bust as HM Treasury has bigger pockets than any commercial bank. This means, although it's not an official guarantee, NR is safer than any other bank, excepting NS&I, which is also government owned.

If the government did go bust your money would be worthless anyway .

count_arthur

Yes indeed, point taken.
However, I wonder if this may be relevant: http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/4142209/Northern-Rocks-future-under-scrutiny-as-government-dithers.html
Could the removal of the web pages defining the Government guarantee be the first stage in preparing the ground ready for selling the customer deposits, as with Bradford & Bingley?

isofa

Unless they just want to discourage savers from depositing more then 50K to push it into other parts of the banking system...

dougs

count_arthur wrote: »

Has the 100% guarantee now been quietly dropped?

wouldn't surprise me at all if it has. Probably shouldn't expect anything different from this slimy snake in the grass government, who are totally incapable of being open and honest about anything.

nilrem_2

dougs wrote: »

wouldn't surprise me at all if it has. Probably shouldn't expect anything different from this slimy snake in the grass government, who are totally incapable of being open and honest about anything.

Totally irrelevant, the fact is that the government has shown that it will support savings in the event of a bank getting into any difficulty, they even compensated savers in full who saved with an Icelandic bank when they did not need to do so, whether or not it says on the NR site that your money is safe I think we can conclude that it is!

soulsaver

The govt undertook not to high-light the fact that the NR position is a competitive advantage over all other UK banks - so it's not allowed to offer market leading rates; it has a cap on what total % of deposits it can take; and it isn't allowed to advertise/capitalise on its deep pockets (100% guarantee). So its not pages that have been taken down, its 100% guarantee never been stated on NR webby.
I suspect the same tacit protection is similar on Lloyds Banking Group, too, now that HMG owns 43%....

count_arthur

soulsaver wrote: »

So its not pages that have been taken down, its 100% guarantee never been stated on NR webby.

Ah, but it has. . . this from the NR website on 23/02/2008:

"Government guarantee arrangements
On Tuesday 9 October 2007, the Bank of England and HM Treasury, confirmed that the guarantee arrangements previously announced to protect existing deposits with Northern Rock plc will be extended. Northern Rock has agreed an extension that brings enhanced protection for all of our customers - existing and new.
The Bank of England and HM Treasury have guaranteed:
·All accounts existing at midnight on Wednesday 19 September, including new deposits made into those existing accounts.
·All new retail deposits made after Wednesday 19 September, including new deposits made into those accounts.
·All future interest payments and movement of funds between accounts.
·All term deposits for the duration of their term.
These new agreed arrangements protect all savers in all accounts, regardless of the amount deposited and apply to all existing and new accounts. The position for retail depositors has not changed. There is no need for customers to withdraw their money. It is completely safe. The government has put in place guarantee arrangements for all savers. The guarantee arrangements will remain in place during the current instability in the financial markets. There is currently no specific end date on these guarantee arrangements."

Since this has been removed, and the standard FSCS scheme now applies, it would appear that Northern Rock now offers neither more nor less protection for deposits over £50,000 than any other organisation in the scheme.