Update on Northern Rock
Posted by: Philippa Gee
September 18th, 2007.
The news that the Government have pledged to guarantee all existing deposits with Northern Rock is most welcome and should serve to draw a line under these most difficult events. It allows investors time to pause in their deliberations and avoids the need for knee-jerk reactions.
Having said that, I would personally not retain money invested with Northern Rock going forward because I do not feel they represent good value. The savings market is extremely competitive and while Northern Rock have increased their rates to generate more business, my concern is how long-term these moves will be. By taking moderate, measured reactions, you can move your money to accounts which consistently offer competitive rates and at all times use a number of different banks and building societies.
It goes back to the issue of looking past the headline rate of a deal. Be it saving or borrowing, you need to look at the pedigree of the company and their underlying assets.
Moving forward, consumers have no choice but to go back to basics, applying old-fashioned rules to financial planning. There was always going to be the inevitable D-Day on credit overload and consumers need to take stock. This means managing your finances. Clear your personal debt, spread your savings and investments to minimise your exposure to risk and don’t take out a mortgage that you can’t afford.
This entry was posted on Tuesday, September 18th, 2007 at 9:17 am and is filed under General, Investments.
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