Deposit protection cut

Money guaranteed in bank accounts will drop by £10,000 to £75,000 from the beginning of next year.

The change is the result of the strength of the pound in the currency market.

The deposit guarantee is harmonised across the European Union at €100,000, with a revaluation every 5 years.

But the euro has fallen, with the Greek crisis driving it even lower in recent weeks.

The result is that while bank account holders in the eurozone see no change in their level of protection, UK savers will have to put up with a significant reduction.

The Treasury said the change would have been implemented today but it was delaying it until January next year to give the public a chance to adjust to the lower level of protection.

The guarantee has stood at £85,000 since the end of 2010.

£1m deposit guarantee

The Bank of England is to boost protection of bank deposits to £1m, for people who have a short-term jump in their account balance because they have sold a house or received compensation or an inheritance.

The proposal, which would come into force by July next year, would mean that the normal guarantee covering £85,000 of a bank account balance would be raised temporarily for a period of 6 months.

The Bank of England's Prudential Regulation Authority is bringing in the new rule to comply with a a European directive.

The PRA is also planning to create a "seamless" process of transferring accounts from a failed bank to a new account provider, so that customers will be able to use them as normal within 24 hours.