Mums Finance

As expected, Bradford & Bingley joins the ranks of the bankrupt banks in the UK and the mess gets swept up by the government (ie you and me).

This time around at least they’ve learnt something from the Northern Rock fiasco and are selling on the branches to Santander and “only” keeping the worst parts of the business ie the mortgage side of things. Presumably they’ll be working to shift the best of the mortgages elsewhere too but that’ll take longer.

Who will be next though? This piecemeal approach means that we can look forward to a string of banks in the same situation for months to come unless the economic outlook improves unexpectedly. In the frame seem to be the likes of the West Bromwich and Principality building societies who seem to have been appearing in the news rather too often of late and in the case of the West Bromwich they’re regularly sitting at the top of the savings interest rate tables (along with a number of now bankrupt banks).

Less obviously the Britannia isn’t on entirely firm ground and along with the Yorkshire has suffered a recent downgrade in risk rating by various agencies.

But where do you run to in times like this for safety? Well, in the UK the only truly safe place is National Savings which is effectively a part of the Bank of England and therefore covers your money 100% (ie there’s no £35,000 limit as with other banks). Sadly they only offer a limited range of accounts so it would be difficult to use that as your only bank but if I’d a large chunk of savings at the moment I’d be inclined to use that and just ring them to transfer money to my cheque account as required.

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