Banking News Savings Accounts Compensation Could Be Increased To 77700 2365

Savings accounts compensation could be increased to £77,700

16 October 2008 / by Rachael Stiles
Legislation has been drafted by the European Commission to extend the level of protection for savings accounts to €100,000 (about £77,700), it has been reported.

The Prime Minister Gordon Brown has said that he is open to the proposal that all savers within the European Union would have their savings accounts guaranteed up to €100,000, five times higher than the current EU deposit guarantee of €20,000.

The current EU deposit guarantee is irrelevant in Britain because UK savers are protected up to £50,000, which was raised from £35,000 during the recent wave of economic turmoil. Joint accounts are eligible for compensation up to £100,000.

The proposal is part of a package of other measures that European governments are introducing in order to restore confidence to their financial systems, and to strengthen the confidence of Europeans in the security of their money saved in bank accounts.

Joining Gordon Brown, countries that already guarantee savers up to €100,000, such as Germany and Italy, are expected to support the proposal, but central and Eastern European countries, concerned about the costs to the state of such a high threshold of compensation, are expected to oppose it.

Written by Editorial Team