Lehman Brothers' collapse

Commenting on the Lehman Brothers' collapse, Kevin Mountford, head of savings at moneysupermarket.com, said: "This is a shocking disappointment for an already fragile market. Over the weekend many commentators suggested good news was on the way for consumers in the form of mortgage rate cuts following the US government's bail out of Freddie Mac and Fannie Mae. However, the collapse of Lehman will have put a swift end to those hopes. The UK stock market, and the financial sector in particular, has already plunged on the back of the news, and when the US market opens later today I expect things to be even worse on their side of the pond".

"However, although consumer confidence is likely to take a nose dive, especially amongst savers, the likelihood is that competitive rates will continue. Savings rates will remain strong and we may even see more competitive deals launched as banks, building societies and other financial institutions fight for deposits. So all is not lost for savers who can keep their nerve - the message is definitely don't panic and keep an eye on the best buy tables over the coming weeks.

"The bigger question is whether we will just see the continued churn of existing savings from provider to provider, or will new money come into play from consumers looking to protect themselves with a savings buffer in a choppy environment? Also, what will it do for consumer confidence in markets more generally when people are already asking if they savings are safe in their bank?

"It has been widely reported the Government is looking to revise the FSCS, subject to further consultation. We call upon the Government to take decisive action now and help give consumer confidence a boost - or there is a real danger many people will prefer to keep their savings under the mattress than in their bank!"