Bank bailout costs taxpayers £5 bn a year

A National Audit Office (NAO) overview of Britain’s bailed out banks show they cost the taxpayer £5 billion annually in interest.

The Treasury pays out £5 billion annually to cover the interest on the loans used to prop up banks, and although this is largely covered by fees for state insurance schemes this really is likely to decrease and taxpayers will continue to pay.

Taxpayer support for that banks now stands at £512 billion even though the government’s maximum exposure almost halved in the last year.

The NAO warned from the risks of the government selling stakes within the banks and stopping state guarantees for that banking sector. The report states the government had designed a paper lack of £12.5 billion as of 1 December on its RBS and Lloyds holdings, assuming the shares could be sold at market price and in one go.

The total amount of taxpayer money used to support banks through shares and loans is £124 billion but a further £387 billion under guarantee might be made available.

The report concludes: ‘The scale of the maximum exposures are so large, still £512 billion, that even risks with small probabilities occurring require careful management.’