Bank Savings Protection

Bank Savings Protection.

New proposals are being made by the Bank of England (BoE) to protect savings up to £1m. The new proposals are to be part of a wider reform aimed at consumer protection.

The new rules will see temporary deposits as a result of house sales, inheritance etc, protected up to £1m for a 6 month period. Under the current rules only £85,000 is protected, these new rules are due to come into effect from July 2015.

This is aimed at avoiding a repeat of the start of the financial crisis where customers queued outside Northern Rock to withdraw their money, this resulted in the first run on a British bank for over a hundred years.

It also prompted the Bank of England’s Prudential Regulation Authority (PRA) to come up with plans on making an easy process of switching from a failed bank to a new provider. Meaning that even if a bank went under, customers would be able to withdraw their funds within 24 hours.