I deposited some savings with NR in Sept 2008 in a 2 year fixed rate bond, NR depositors were fully guaranteed by the UK Government at the time and on NR's website was a piece of info stating that if the terms of the guarantee were changed (ie HMG sold on NR to another institution) then depositors would be given 3 months notice to enable them to reassess what they wished to do with their savings.

I phoned NR before depositing and they told me that any withdrawals even because of loss of HMG Guarantee would be allowed but processed subject to any penalties in the T's & C's relating to any notice or term account.

Feels like we are being scammed again, probably get a derisory amount of interest if we pull out any funds or if not we have to rely on dear old Gordon & Alistair to keep on covering any amounts over the £50K FSCS Guarantee.

scaremongering like that is what got northern rock in to such a state in the first place, I think its quite clear that the UK government will not allow a major financial institution to fail as the consequences would be catastrophic

News items indicate that Northern Rock may be sold, i.e. privatised, towards the end of 2009. How does this affect the safety of any savings? Currently, the assumption is that as it is a nationalised bank any amount is guaranteed, but if it sells and goes private would this then reduce to the £50,000 FSCS level? If so, there may be a lot of movement of cash out of Northern Rock. Maybe the only prudent approach is to always spread the money around and keep below the £50,000 in any one institution.