Are customers now off the danger list if a UK bank goes to the wall?

The landscape for British savers shifted, it seemed, almost by the hour last week. From the failure of Landsbanki and its Icesave deposit arm to the dramatic bailout of British banks, savers could have been forgiven for wondering whether they were coming or going. However, one question probably dominated their thoughts: how safe is my money?

If anything, the position over government guarantees is even less certain than it was following the Icesave failure. The Government stepped in on Wednesday to guarantee individual customer deposits in the Icelandic internet bank – although not those of local authorities – regardless of size. And Lord Turner, head of City regulator the Financial Services Authority, was correct in arguing last week that "not one individual saver has lost a penny since this thing [the credit crunch] started".

However, the official guarantee for deposits is still set at £50,000, or £100,000 for a joint account. As a result, it is unclear whether the Government will choose to lift that limit or stick strictly to it in the event of another banking collapse.

"During the early part of last week we saw a quiet run on the banks, with depositors moving their money out into Post Office accounts or National Savings, or even just keeping it at home. The Icesave measure, combined with others taken last week, should hopefully stop this," says Jasmine Birtles from financial advice site Moneymagpie.com. "But while the decision to refund Icesave customers was welcome and should help to restore some confidence, we need to know what will happen if a bank fails again,"

Interestingly, National Savings felt the inflows of cash were so healthy last week that it lowered the interest rates on some of its key accounts. Meanwhile, Northern Rock, now a fully nationalised bank, has virtually shut its doors to new savers. This way, neither organisation can be accused of actively trying to attract saver cash from the troubled high-street banks.