Baronworth comments on Northern Rock

Baronworth comments following today's announcement that the Bank of England has decided to give emergency funding to Northern Rock

There must be many people who are concerned about the safety of their hard earned savings deposited with Building Societies and other depos.

The Financial Services Compensation Scheme acts as a safety net for customers but is very low with regard to deposit takers.

We are not saying, for one moment, that the Northern Rock or any other of the Building Societies is likely to go bust but if a deposit taker did go under the level of compensation is extremely limited.

For monies with deposit takers it is only £31,700 per person calculated as follows: First £2,000 100% £2,000 Next £33,000 90% £29,700 Total £31,700 Building Societies, in particular, are utilised by a massive number of people as a safe haven for their money - often their life savings.

If they are worried about the security of the money they may wish to consider transferring the money into a Guaranteed Income or Growth Bond as the compensation limits are far more generous as follows: First £2,000 100% Balance 90% with no upper limit In addition to the far better cover, Guaranteed Income and Growth Bonds not only compete favourably with Building Societies for basic rate taxpayers but invariably offer better rates for higher rate taxpayers (currently up to 7.60% per annum gross equivalent) due to an anomaly in the tax regulations.

The bottom line is this - If you are not totally comfortable with leaving your money where it currently is, and provided you are a taxpayer, then consider transferring it to a Guaranteed Income or Growth Bond.

Not only may you get better rates but also greater security in the event of a disaster.

As the leading distributors of Guaranteed Income and Growth Bonds we are more than happy to discuss any queries with your readers and/or send them our Guaranteed Bond Surveys that we prepare each working day.

14 September 2007.

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