Some advice from Experian's Credit Expert.

You might have been saving for a holiday or wedding, to pay your mortgage or credit card bills, to fund your retirement or to buy a home – but if you’re one of the hundreds of thousands of people who find their money frozen as a result of recent bank collapses, you may be wondering what to do until you get your hands on it again.

The Financial Services Compensation Scheme expects to start repayments to savers with IceSave in mid-November but people with money trapped in some offshore bank accounts or saved via bonds and other financial products may have to wait much longer, if they are repaid at all. You need a plan – so here’s some help to get you started.

The UK's credit guarantee scheme is designed to unclog markets rather than offer banks cheap funding, writes New Star's chief economist, Simon Ward  (pictured left).

The Debt Management Office has announced that the guarantee fee will be 50 basis points per annum plus the median five-year credit default swap spread for the borrowing institution during the 12 months to 7 October. Averaged across banks, this spread is likely to be in the region of 100 bp (see Chart 1.3 in the August Inflation Report), implying a total fee of about 150 bp.

Short-term measures will not get us out of this mess, says financial expert Dr Ros Altmann (pictured left)

The Government's decision to protect 100% of all retail deposits in the Icelandic bank IceSave is the most dangerous, misguided act of the credit crisis so far.  Anyone who put their money into this bank was doing so because it offered attractive interest rates. 

The press has been full of information explaining that only the first £50,000 was protected by compensation schemes and any amounts above that were at risk. Depositors knew that.  Yet, in another panic reaction, the Government has promised taxpayers' money to reimburse unlimited amounts to all IceSave retail depositors.  This is crazy.

In fact, it is really dangerous.  Firstly, it was not even a British bank so why should taxpayers fund people who saved in an Icelandic institution?  This implies that anyone saving in any bank that fails (not just a British one) will have to be bailed out by the taxpayer too _ where will it stop? This is the road to hyperinflation.  Secondly, why should those who were seeking higher returns be rewarded with both better interest rates and a 'money-back guarantee' from the rest of society? 

The end of free current account banking came another step closer this month, when the chief executive of HSBC, Dyfrig John, said that a general move towards annual charges for current accounts and credit cards was “inevitable,” in response to a regulatory clampdown on penalty charges.