Teresa Hunter: More protection for savers - but check the detail

THE start of the new year brought with it a new investor protection regime. Bank and building society depositors can now receive up to £85,000 compensation should their savings institution go down.

Previously only deposits to a maximum of 50,000 were safeguarded. But as ever, investors still need to keep their wits about them to ensure their money is safe.

The compensation arrangements only apply to investments with firms authorised by the Financial Services Authority in the UK. Furthermore, they do not cover all investments with every firm.

Rather, the rules apply to money held with all institutions regulated under any one banking licence. And herein lies the danger. Many savings brands are authorised under one licence; the typical example being Halifax and Bank of Scotland, which not only share a licence with each other, but with other brands such as the AA and Saga.

This means only a maximum 85,000 in total saved with all the organisations under that particular licence is covered.

It is vital therefore to check the regulation of all organisations you save with, and the banking licences which supervise them. And you have to keep checking, as these arrangements change.

For example, from the new year, the separate protection afforded to the Dunfermline, Derbyshire and Cheshire building societies, which had continued despite the Nationwide takeover, came to an end. Now only a maximum of 85,000 across these four brands will be protected.

The same applies to the Co-op Group. From the new year, its Co-op, Britannia and Smile brands are covered by a single licence. It's the same again at the Yorkshire Building Society and the recently acquired Chelsea and Barnsley.

Downwardly mobile

ANYONE who attempts to predict house price movements is a fool, and has there ever been a bigger one than Westminster housing minister Grant Shapps?

Shapps must have been at the schnapps when he waxed lyrical on the airwaves and in various newspaper articles about the need for sustained house price falls. Where on earth were his Tory minders?

It is very tiresome, indeed faintly insulting, when senior politicians insist on displaying their ignorance. So price falls in property, such as those in white goods, would be a good thing would they? Do you think he stopped for a minute to consider how it was that cheap electrical goods came to flood our markets? The items were made by employees paid poverty wages, whose governments are not burdened by the financial straitjacket of a welfare state.

So insecure are their lives, they are forced to save the little they earn to protect their families, which had the added advantage that they were able to lend us the money we needed to buy their cheap goods.

What has any of this, or should any of this, have to do with the UK housing market? Yes, we can all agree it might be a good thing if property were cheaper.

There are sound reasons why it is not. People are living longer, so demand is high. Interest rates are a fraction of where they stood 20 years ago, so buyers can afford to borrow more. Women work longer and earn more than their mothers. And despite the credit crunch, many borrowers can still borrow more than would have been possible in the past.

For anyone, let alone a housing minister, to suggest property should fall a further 40 per cent in real terms over the next 20 years is not so much snaps, Shapps or schnapps, as a load of craps.

New year, new deals

WITH the new year, though, has come a flurry of new mortgage offers. Lloyds TSB has launched a three-year fixed-rate mortgage at 3.74 per cent, if you have 25 per cent to put down as a deposit. With a fee of 1,495 it is largely suitable for those looking for big loans.

Halifax launched a new fee-free mortgage for first-time buyers with a 10 per cent deposit at 5.79 per cent fixed for two years. Clydesdale has slashed fees on a range of its mortgages for current account customers. And Barclays has improved the terms on its Great Escape mortgages, which are now available to those with a 20 per cent deposit.

Fair cop for Chaytor

IT WAS a shock to hear that former Labour MP David Chaytor had been jailed for 18 months for his part in the expenses scandal. The former lecturer and MP for Bury North was sentenced after admitting to fraudulently claiming more than 20,000 in expenses.

It is all very sad. But every employee in the land knows that anyone who steals 20,000 from their employer will be prosecuted. It is not the verdict which is regrettable but the crime. The verdict sends a powerful message to us all: no-one is above the law.