I just came across this news story from the BBC regarding Alistair Darling’s new proposals to try and help safeguard the UK populus’ savings deposits held at UK banks and building societies.

Although the principal is a good one, no-one seems to be putting up the additional guaranteed money to support the scheme… Isn’t this a fundamental flaw? After all, the fund is set up to give customers a hope of recouping some of their lost savings if their bank goes under and can’t afford to pay-out it’s creditors… i.e us! It just seems to be a magical pot of money that doesn’t actually exist… which is slightly worrying! Surely there’s an accrual somewhere? DOH!

 Savers’ cash safer if banks fail

Chancellor Alistair Darling has proposed new measures to protect savers in the event of a bank getting into financial difficulty.

The plans are intended to increase public confidence in the banking system in the wake of the near collapse of Northern Rock in September last year.

As part of the plans, the threshold for guaranteed deposits is expected to rise from £35,000 to £50,000.

Any changes will come into effect in the autumn or early in 2009.

The chancellor has presented his written proposals to the House of Commons, ahead of a consultation period.

The measures are not set to cost banks any cash up-front, they will only be approached if problems occur.