Northern Rock deposits lose savings guarantees


THE government yesterday lifted its 100 per cent guarantee on all variable rate accounts at Northern Rock as the beleaguered bank slowly returns to health.

Millions of savers will now have the same protection as depositors with other banks. This covers them for up to £50,000 for individual accounts or £100,000 for a joint account. Those with fixed-rate accounts will continue to enjoy the unlimited guarantee until the end of the agreed term.

Northern Rock introduced the guarantee two years after the government was forced to step in and reassure panic-stricken savers as they queued to withdraw their cash.

However, this attracted many wealthy individuals and led to complaints from rival banks that Rock had an unfair advantage.