Darling to raise FSCS limit - papers 1 July

The protection limit for savers is set to be raised to £50,000 under proposals due to be announced by the Government today, The Telegraph reports.

As it stands savers are now entitled to compensation of 100% of their money up to a maximum of £35,000 in the event of a bank collapsing.

But MPs are understood to want to raise this to £50,000 for the Financial Services Compensation Scheme, which provides the ultimate safety net for Britain's savers and investors.

In addition, other changes have been mooted for the FSCS. One involves a change in the basis for compensation. At present, it is paid on a net basis.

CLIVE COWDERY HAS drawn up a hit list ranging from building societies to mortgage specialists that he plans to target, having walked away from Bradford & Bingley, also according to The Telegraph.

Among those of interest are Bristol & West, owned by Bank of Ireland, and the UK arm of US financial services giant GMAC.

The entrepreneur is also considering niche brands such as edeus, the sub-prime lender set up by Michael Bolton, the former head of specialist lending at HBOS, and Mortgage Works, a subsidiary of Nationwide building society whose business lines include “self certification” loans, where the customer does not have to produce proof of income.

Amber Homeloans and Accord Mortgages, which both operate through brokers, are other targets. He is known to be interested in recognised lenders Paragon, which provides loans to professional landlords, and Kensington Mortgages, which started UK sub-prime lending in the mid-1990s.

BRADFORD & BINGLEY’S hopes of securing a swift financial rescue were dealt a blow yesterday after a campaigning investor group told the bank’s small shareholders to consider blocking its £400 million bailout plan, The Times reports.

The UK Shareholders Association (UKSA) urged B&B’s 930,000 individual shareholders to attend next Monday’s emergency meeting and to demand answers about a £258 million rights-and-stake sale to TPG, the American private equity group.

Roger Lawson, a director at UKSA, said that the board, led by Rod Kent, the chairman, had failed to explain its rejection of a second financing proposal from Resolution, the investment vehicle. Retail investors account for about 40 per cent of B&B’s shareholder base. A mass protest vote, particularly if backed by fund managers in the City, could jeopardise the plan, which needs approval from a straight majority.