1.7 million Savers flee Northern Rock

According to a report by MoneyExpert.com worried savers have been deserting Northern Rock at alarming rates, as many as 50,000 a day. In total at least 1.7million people have moved their savings in the wake of the Northern Rock crisis.

Sean Gardner, chief executive of MoneyExpert.com, said Northern Rock had been a "wake-up call" for savers. "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," he said.

The comparison site’s research has found that the most popular reason for savers moving their money was to reduce the risk of having all their cash with one company. It seems the shock waves generated by the near collapse of Northern Rock have motivated savers to seek what they perceive to be a safer option.

In many cases this has meant spreading savings across more than one company, an option that has become all the more attractive since the government’s commitment to guarantee the first £35,000 of savers money – splitting savings over more than one institution means there is less chance of exceeding the guaranteed amount.

Canny savers have been prompted to ensure that all their savings are safe by moving their cash across multiple institutions by a loophole in the government’s compensation scheme that means the £35,000 guarantee is limited to one institution rather than one account. As a result it’s important that those looking to spread their savings make sure that their accounts aren’t part of the same of institution – savers with RBS for instance should be aware that the RBS group also includes Directline and Lombard. Anyone considering a switch should also be aware that the government is rumored to be considering raising the guarantee to £50,000.

If you’re thinking of moving your savings the following table provides a summary of some of the top deals available at the moment:

Figures correct at time of writing (13/11/2007)