Northern Rock crisis 'has made people cautious about saving'
Published On 24 September 2007
The recent troubles at Northern Rock have made consumers far more careful about where they put their savings, an industry expert has said.Jim Spowart of Peopleschampion.com, explained that the financial difficulties that the lender experienced last week meant that consumers increasingly wanted to put their money in a place where it was secure.
To this end, Mr Spowart said that the public were prepared to ignore the best rates of interest.
"Many people - especially older people - are being much more cautious with their money," he added.
"They have been bitten first by the pension crisis, and now Northern Rock, so instead of going instinctively for the highest return, they are looking more at safer havens where they know their money is secure.
"This might well be a temporary position, but I think it shows the importance of rebuilding consumer confidence. I don't think this is going to go away for a while though."
At the end of last week (September 21st), Simon Ward, an economist at New Star, suggested that the Bank of England may have 'supported' Northern Rock to the value of £2.9 billion.
