Savers can look forward to a welcome boost as the government looks to put confidence back into the banking system.

Savers, who were covered for the first £35,000 of savings in any one financial institution in the event of a collapse, will now see that level of cover rise to cover savings of up to £50,000 under new plans due to be outlined later today.

The move is a step short of the steps taken by the Irish government, who have pledged to guarantee 100% of deposited funds in the event of a collapse, although the government were quick to point out that not one saver had lost out amid the recent problems faced by Northern Rock, Bradford & Bingley and HBOS.

Figures from the British Bankers Association from 2007 suggest just 2% of UK bank accounts hold more than £50,000, whilst only 4% have more than £35,000.

During their party conference yesterday, Conservatives claimed that they will support the increase in deposit protection to £50,000 and would set aside political differences to back other government measures on the economy which were needed.

David Cameron told the conference that political leaders must work together to tackle the current crisis and avoid the "political wrangling" seen in the US.