Big banks go bust, market crashes - what do I do?

Lehman Brothers bite the dust, share prices collapse and speculation on the future of other banks. What are we supposed to do in such circumstances and where do you put your savings?

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No good investing in property because values are declining, forget shares unless you are particularly brave (albeit many would argue now could be a good time) and worst of all – safe ol’ cash in a bank – well even that’s not bulletproof. All of a sudden ‘under the mattress’ doesn’t look such a bad option.

Seriously though, depending on how much you have in savings, remember that up to £35,000 in savings (per individual; per bank/building society) is 100% protected with the Financial Services Compensation Scheme. If you have sums in excess of this you may want to spread it across different savings institutions to ensure your savings are fully protected. Note the protection is per institution, be it bank or building society e.g. HBoS includes Halifax, Bank of Scotland & Birmingham Midshires amongst others.

One positive to come out of this is that, despite high inflation figures coming out 16th Sept, there has to be little or no likelihood of an interest rate rise. In this current climate that would be madness so despite fuel and food rising your mortgage shouldn’t! 

Even if you haven’t got lots of savings the present crisis is not good news. So much depends on a safe banking system and of course many people have pensions and the value of them will be heading south. For me, it’s a case of sit tight. I really hope this gets off the news pretty fast so that we can all breath easy again.

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