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Credit crisis: are you feeling the crunch?
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Financial crisis: risks for your savings

 

There's no need to start stashing your life savings under your mattress just yet. Under normal circumstances, you won't lose your savings if your bank goes bust, for several reasons. First of all, deposits with registered banks and building societies in the UK are secured under the Financial Services Compensation Scheme (FSCS) for up to £50,000 per person (the limit has been raised from £35,000). For more info, see www.fscs.org.uk.

Secondly, the scale of the risks UK banks have taken is different from the risks taken by their American counterparts; and thirdly, in the current climate, UK banks that fail are being nationalized to save them from going under.  

Mr and Mrs Average will feel the impact of the crunch in terms of economic growth and the job market. The economy will slow down (some experts predict economic growth as low as 1% in 2009)it will be harder to get a mortgage, and unemployment is at its highest level for nine years. And if you own shares, now obviously isn't the time to sell them, as the FTSE is falling and looks set to fall even further before the crisis is over.

The only good news (there is some, at least) is for potential buyers, as housing prices may drop further. 




  
  

Sarah Horrocks
2008/11/03
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