Northern Rock govt guarantee ends when?

gozomark

mr_fishbulb wrote: »

Don't worry gozomark, I got it

thank you - my answer may have appeared flippant, but that is the answer. In the legal notice from the govt, there is no time limit. The only risks you face are
1. re-privatised
2. govt goes bust
3. if caught out by 3 month notice period

or in other words my first post "realistically, until they sell it, or the UK goes bust"

http://www.hm-treasury.gov.uk/press_149_07.htm

No change is being made to the guarantee arrangements in respect of retail deposits of Northern Rock plc, which remain fully protected under the announcements previously made by HM Treasury.

Reasonable notice, which will not be less than 3 months, will be given by HM Treasury of any termination of these arrangements.

soulsaver

Just copied this from NR webby:
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.

gozomark

if the current owner of NR went bust, I wouldn't hold out much hope of the FSCS being much use, so the above, while true, is irrelevant

webtalk

When the Govt first stepped in with NR they put a time limit on how long savings would be guaranteed for (I think about 3 years), then they put a conditional extension on after that - subject to notice of 3 months or something.

What I'm looking for is the period when the absolute guarantee runs out - ie, the initial period. It doesn't take a rocket scientist to work out that if the country goes bust the guarantees do too - so that discussion is irrelevant to this thread.

As is discussion on how bad the interests rates are. It also doesn't take a rocket scientist to know that.

Quoted from the MSE savings section:

Do any banks offer 100% safety? A. Yes, two; simply because they're both currently owned by HM government! All savings in Northern Rock and National Savings & Investments are 100% guaranteed. This does mean, if you've a lot of cash (well over the £50,000 amount) and the safety factor worries you, to put a portion of your cash in there for ultra safety is a reasonable, cautious strategy. Yet as the rates don't tend to be that good, be aware that by hedging for safety you're sacrificing interest.
Northern Rock.

• Northern Rock was nationalised in February 2008 following its brush with the [URL="javascript:displayHiddenBlock(1)"]Credit Crunch[/URL]The Credit Crunch This is the name given to the current phenomena that banks and other big financial institutions are struggling to find money to borrow. As they can’t find money to borrow they’ve less to lend out, which means the cost of debt is increasing, and its availability is decreasing. In other words it’s getting more difficult and more expensive to borrow.
  
  [URL="javascript:hideHiddenBlock(1)"]Close[/URL] Following that crisis, the Government stepped in to give a 100% guarantee on all ‘existing savings’ there, then extended it to new deposits too.
  This means anyone saving with Northern Rock, whether from before the crisis, since it, or even if you took your money out and now re-deposit it, will get back your whole balance, plus interest that you’re owed and any money that you subsequently deposit there in the future.

Source: http://www.moneysavingexpert.com/savings/safe-savings#safe

So ... there was an initial period with an extension added that effectively created a notice period during the extension. I want to know when that initial period ends as that is the only certainty in terms of timings (oh, and lack of certainty noted for the sake of those who insist on bringing in the country going bust equation).

gozomark

no need for thanks, my pleasure

the initial period is irrelevant - its been superceeded by the min 3 month notice period - that is all that matters

webtalk

gozomark wrote: »

the initial period is irrelevant - its been superceeded by the min 3 month notice period - that is all that matters

So ... if all that matters is the min 3 month notices period, what you're saying is that the minimum three month notice period could start tomorrow?

And, if set at 3 months tomorrow, all savings would only be guaranteed until the 9th June 2009?

And therefore the initial guarantee period of about three years (due to end sometime in 2010) is nul and void?

This is what I understand you to be saying. Unless, of course, the country goes bust before that.

gozomark

correct..........

webtalk

gozomark wrote: »

correct..........

Right. Thanks.:beer:

So effectively they've reneged on their original commitment. Interesting - idjuts.

gozomark

I'm not sure they ever specified a time limit, in which case there was nohing to go back on - I think they only said it will stay in place 'during the current instability in financial markets' - that was the case for new savers anyway

webtalk

I have this three year limit in mind, which is why I've been asking. I thought I had a copy of the Treasury statement but my creative filing system won't allow me to find the relevant bit of paper.