Hi,

It is and it isn't.

What you're seeing is this being the first case. The guarantee would probably have been made if it was a UK bank too, although in reality the government would likely have nationalised it to prevent it folding, hence the current bail outs taking place) The government undoubtedly wants to guarantee everybody's savings no matter how much they have invested, but let's be honest, without knowing who will fold and who won't, that wouldn't be prudent as they almost certainly don't have that much money. That said, if a UK bank does fold (and I imagine one big one will) then they will certainly do as much as they can without turning this into a third world country.

Please let me make one point. The guarantee only goes to £50k per bank, so if you have more than that, for goodness sake stick it into a range of banks, max of £50k in each. It's just much much safer for you, regardless of the rights and wrongs of the situation.