Bank deposit guarantee scheme to be extended

This change, which is some way short of the Irish who have fully guaranteed all deposits in High Street banks, is contained in the Banking Bill which will be presented shortly.

Commenting on the issue Nick Clegg the Lib Dem leader said that depositors must be given a "copper bottomed" guarantee that their savings are safe, while he hoped that parties wouldn't split hairs over policy differences.

Meanwhile Kevin Mountford, head of savings at, commented: "Tonight's announcement by Gordon Brown that the UK compensation limit for savings will increase from £35,000 to £50,000 is a case of better late than never. The Irish Government's initiative to stand behind 100 per cent of savings deposited with Irish banks is likely to have spurred the UK Government into action. If it hadn't acted now we'd have seen a flood of UK savings into Irish accounts - with banks such as Allied Irish and Anglo Irish already offering attractive rates to UK savers.

"The proposed new £50,000 UK Financial services compensation Scheme limit should be enough to stem this flow, especially as doubts remain as to whether the Irish Government could actually fund its guarantee if it were required to."