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BANKS around the world have crumbled, stock markets have nosedived, post offices have been axed and mortgages have dried up.

House prices slumped by 15 per cent despite interest rates being slashed to the lowest they have ever been. STEPHEN WOMACK looks back at a turbulent year that we will all be relieved to put behind us..

RADFORD & BINGLEY, Halifax and Alliance & Leicester - just three of the High Street names that lost their independence in a year that tested the financial system to the limit.

In a single tumultuous week in September, Halifax Bank of Scotland was forced to agree to a panic merger with Lloyds TSB, American investment bank Lehman Brothers went into bankruptcy - with knock-on effects for thousands of UK savers who invested in bonds backed by the bank - and the world's biggest insurer, AIG, had to be bailed out by President Bush.

A fortnight later it was the turn of the UK government to bail out Bradford & Bingley. Its mortgages and loans were nationalised while its savings business and branches were sold to Spanishowned Abbey.

The banking crisis left millions worried about the security of their savings and in October the Government increased the amount of individual savings protected with each bank or building society from [pounds sterling]35,000 to [pounds sterling]50,000. It was just in time. Days later came a second wave of troubles with the collapse of Icelandic-owned savings banks Icesave, Heritable and Kaupthing Edge.

There had been warning signs. In March, Financial Mail questioned the security of overseas banks and warned that compensation would take longer if they went bust. And in August we examined how UK savers would cope if an Icelandic bank collapsed.

On this occasion, Gordon Brown was forced to step in so that customers of Icesave were protected through the Financial Services Compensation Scheme, while the majority of customers of Heritable and Kaupthing Edge transferred to Dutch-owned ING Direct. But those who had their money offshore with Kaupthing are still struggling to recover funds.

In a turbulent year for building societies, Financial Mail monitored the health of mutuals. Our reporters attended more than a dozen AGMs and we have tracked the crisis that has seen Derbyshire, Cheshire, Scarborough, Barnsley and Catholic societies forced into mergers.

Banks are permitted to have separate financial protection for each brand, but as the law stood, any building society being taken over would lose the safety net of twin deposit protection. This affected savers such as Kenneth Burt, 82, from Beeston, Nottinghamshire, who had money in Nationwide and Derbyshire.

After we highlighted the anomaly, the Financial Services Authority had a rethink and last month announced a concession for merged building societies to retain investor protection for each savings brand they offer.

The two per cent base rate is the lowest on record. Falling rates have given relief to some borrowers, particularly those on tracker mortgages, but many credit card and overdraft rates have barely shifted. Meanwhile, falling rates make it much harder for savers to get a good income.

Financial Mail has fought hard to give pension savers a better deal when they convert savings into an income with an annuity. We launched a campaign in May to highlight the poor information and administration around annuities. Since then the regulator has clamped down on insurers' shoddy literature and they have agreed to speed up annuity transfers.

Aviva, owner of Norwich Union, spent much of 2008 mulling over a payout of surplus money from its with-profits funds. Plans for a [pounds sterling]2.1 billion special distribution to boost policy values were announced in February, but will be paid over three years.

A second reattribution deal was finally struck at the end of July, with Aviva promising a further [pounds sterling]1 billion for customers in return for them giving

For a full round-up of the financial crisis in 2008, go to thisismoney. …