Governments N Rock philosophy

  newman35 17:15 23 Sep 2008

A friend has about £30k in a NR savings account, which she has had since May at the advertised rate of 6%. She got an email this week saying the rate was being altered to 5.75%. As there has been no Bank Rate change since March she wondered why NR had suddenly reduced it's rate, so she emailed them to ask.
She was so flabbergasted by the response and she sent it to me, it actually said ' they (NR) will not knowingly keep their products in a market leading position' - as part of their 'Competitive Framework'.

I wonder if other savers with NR realise that their interest rate will never strive to be a 'leader'?? Glad my money is out of there, as I'm sure my friend's is by now!

If that's the line with a 'nationalised' bank it speaks volumes.

  Pineman100 17:24 23 Sep 2008

I'd love to know why this is their policy.

Could it be that, as NR now a nationalised institution, the Government doesn't want it to use its 'fireproof' position to attract business from other institutions? This could prompt cries of 'foul'.

  newman35 17:37 23 Sep 2008

I reckon that's exactly it - but then why were they allowed to offer the 6% in the first place?
Just to 'fill the coffers' , precisely like the NWide advert on TV.
But to be so devious under the 'wing' of Government is truly disturbing (and then again, maybe not!!).

  Arthur Scrimshaw 20:40 23 Sep 2008

and has been stated by the Government on many occasions - they want to wind up Northern Rock as soon as possible.

  newman35 22:15 23 Sep 2008

If people realise what principle drives them, then I think it may not be long until it happens.

  oresome 09:04 24 Sep 2008

Savings institutions rely on the lethargy of their savers. It can also be a time consuming job moving largish amounts of cash with several days loss of interest which negates some of the expected gains. One account I used had a withdrawal limit of £5000 per day even though it was instant access for example.

But I agree with Arthur Scrimshaw. The policy with N.R. has been clear from the outset. It's about stabilising the business until a buyer can be found, not winning new business using taxpayers funds.

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