If you haven't heard of Northern Rock in the last couple of weeks then you have probably been living in a cave. Amongst all the hype, finger pointing and political gesturing that the bank's nationalisation has provoked however, there are actually issues that will effect the man in the street beyond making all TV rubbish for a couple of weeks. Read our easy to understand guide to the Northern Rock saga and find out exactly what these issues are.



What is nationalisation?

This means the Government has taken control of a privately-owned business, and changed it into a publicly owned and publicly run concern. Congratulations, you now own a bank.

How long will this nationalisation go on for?

The Government will be keen to find a private owner for the bank as quickly as possible but there is no guarantee that this will happen. The main reason that nationalisation happened in the first place was that finding a buyer prepared to make a decent offer proved impossible. Until a bidder willing to meet the Government's evaluation emerges, Northern Rock is likely to remain a public business.

Who will run the bank?

Chancellor Alistair Darling has appointed troubled-bank troubleshooter Ron Sandler, to be executive chairman. Nice work for ?1 million a year.

What will he do?

Mr Sandler's first objective is to repay a ?25 billion emergency loan from the Bank of England. His long-term goal is to sell the bank, at a profit, to a private bidder some time in the future. The bank employs 6,500 people, mainly based in the North-East, and serious job cuts appear inevitable.

Is the bank still operating?

All 76 branches are open as normal, as is the website.

What will happen to my Northern Rock savings?

There is no need to panic because savings with Northern Rock are actually safer than they are with any other bank. Money belonging to one million savers has been guaranteed by the Government since September, and this protection is not extended to money saved anywhere else.

What will happen to my Northern Rock mortgage?

The bank has taken the unprecedented step of telling customers to look elsewhere for a better deal. Essentially their rates are now so uncompetitive that when you get to the end of your current deal it is unlikely to be worthwhile seeking a new one. Until then you should just continue making your monthly repayments as normal. Thought the owners of your mortgage lender have changed nothing else has.

What will happen to my Northern Rock shares?

The banks 180,000 shareholders are certainly the biggest losers in this crisis, and are likely to end up with little to show for their investment. Shares were suspended at 90p on Monday ? down from more than ?12.30 a year ago. The Treasury will appoint an independent valuer to decide how much compensation should be paid, but some sources have suggested it could be as little as 5p a share. Contact the UK Shareholders Association for advice on how to claim compensation.