The guarantee that protects your savings should your bank go under looks likely to increase from £35,000 to £50,000 this autumn.
That would still fall well short of the £100,000 guarantee suggested last year, but it will no doubt come as welcome news to savers made nervous by the tumultuous conditions in the money markets.
As further good news, the basis for compensation may also be changed so that any savings repaid are no longer offset against any loans or debts you may have accrued.
Finally, the amount of time it takes for compensation to be paid out could be reduced to a maximum of seven days.
Acting quickly and decisivelyThe proposals were all put forward during a consultation between the Treasury, Financial Services Authority and Bank of England back in January, but the documents were only made public recently.
"No system of regulation can or should prevent the failure of each and every institution, but we must do everything possible to prevent problems which could pose a wider threat to stability,” says Chancellor Alistair Darling.
"The challenge is to ensure that the authorities can act quickly and decisively where necessary to support financial institutions. These proposals will give the authorities the full range of powers they need."
Avoid exceeding the limitIt’s important to remember that the proposed increase of the savings guarantee will only be discussed in the autumn, so you’re still only protected up to £35,000 at the moment.
If you happen to hold more than this in savings, make sure you split it up into smaller pools and invest each with a different bank. Keep in mind that two unrelated banks may be owned by the same institution, and thus only offer one guarantee.
So for example, if you had £35,000 with HSBC and £35,000 with First Direct, you would only be covered for £35,000 in total as the latter is owned by the former.
