UK banks want people's money to return

01-08-2011 09:11 BJT

Watch Video

Play Video

After experiencing the financial crisis and the collapse of banks, people are afraid of losing their money in banks.

Researchers say more than one in 10 Britons save money at home rather than using financial institutions. Now, it's time for bankers to take action to restore people's confidence.

Almost three years ago Karoline Rutrecht would have thought twice about withdrawing money from her account.

She was close to losing all her savings when Icelandic bank IceSave collapsed.

Karoline had 3500 pounds, just over 5,400 U.S dollars, invested in an IceSave account.

Now more confident about how she spends her pennies, she said she's still cautious when it comes to banking.

Karoline Rutrecht, said, "I do my homework a lot more, looking for the best interest rate or the, I guess the lowest account keeping fees around sort of isn't my top priority anymore. It's looking to see that my money will be covered should something happen."

Karoline managed to get her money back through the Financial Services Compensation Scheme.

It guarantees savings of up to 85,000 pounds if an institution goes bust.

Research from the FSCS shows more than one in 10 Brits save their money at home rather than using financial institutions.

The report also claims there's 7 billion pounds in cash stored across UK households.

The FSCS wants to raise awareness about their savings safety net, Mark Neale is its CEO.

Mark Neale, Chief Executive, Financial Services Compensation Scheme, said, "Ultimately I would like everyone every adult to be aware that their money in banks, building societies, insurers, their investments is protected bt the Financial Services Compensation Scheme so that people do consume those products with confidence, aware of the protection that we provide, and aware of the conditions under which that protection operates."

Britain typically is a nation of spenders rather than savers.

Although splashing out can stimulate the economy lifting it out of recession, not saving can also impact the market in the long run.

Martin Shaw is from the Association of Financial Mutuals which manages and protects savings.

Martin Shaw, Chief Executive, Association of Financial Mutuals, said, "I think the financial crisis and the failure of some of the big banks has lead people to be more cautious about trusting their money in the banks. So even though there's a compensation scheme in place, not everybody knows about it, and those people that do know about it don't altogether believe that putting their money in the bank is necessary."

With the FSCS' awareness campaign now firmly in place they're hoping to stop people like Karoline from turning their back on the banks.

Editor:Zhang Pengfei |Source: CNTV.CN