Savers spread their money in Northern Rock fallout

Some 1.7 million Britons have transferred funds from their savings accounts since the Northern Rock crisis began on September 14th amounting to almost 50,000 people per day, according to research from MoneyExpert.com.

And the independent personal finance comparison website’s research shows that the main reason for moving is to reduce the risk of having all their cash with one company after the near-collapse of Northern Rock.

Around 44 per cent moved to split their money among financial institutions and another 28 per cent said they switched to take advantage of the Government commitment to guarantee the first £35,000 of savers’ cash so that they no longer have more than the limit in each account.

Major high street banks have been the main winners - one-in-five (20%) shifted their savings to what they described as ‘safer hands', stating that better known, high street institutions now represented a less risky option.

Sean Gardner, Chief Executive of MoneyExpert.com, said: “Savers have taken the Northern Rock crisis as a wake-up call with up to 50,000 a day moving accounts.

“The queues outside branches may have gone but the concerns about a re-run remain and many are reacting by ensuring that their savings are not all in one basket. The fact that the Government guarantees £35,000 has hit home and savers are reacting accordingly.

“It’s interesting to see that despite increased competition having made such a huge impression on the banking landscape over the past ten years, many people now appear to be giving a greater vote of confidence to the established, high street banks.

Research shows around further one-in-three (33%) Britons (16 million) believe that smaller, less well known providers represent a greater risk than the major high street brands at this current time. Furthermore 72% of savers that have left their money untouched said that they’d felt confident in doing so as their bank is a respected, well known high street bank.