If you are a nervous British saver then you should know that Irish eyes are smiling on you.

If you are worried about more British banks going bust, Irish institutions such as Bank of Ireland and Anglo Irish Bank (which both operate in the UK) this week became some of the safest places to keep your cash.

And that is very good news for any of you who have money in a savings account run by the UK Post Office, which channels funds into Bank of Ireland.

• Irish Government increases compensation scheme

The Irish government has decided to beef up the country's "deposit protection scheme" (similar to the financial services compensation scheme that protects UK savers) so that it now covers savings up to €100,000 per person, per bank.

Roughly speaking, that is about £79,000; more than double the £35,000 protection the UK offers.

And there is some good news…this is a move that does not just benefit those living on the Emerald Isle!

You do not have to be resident in Ireland, or be an Irish citizen, to claim. As long as your money is held in a bank or building society that is part of the scheme, and your account is one of the types covered, you can make a claim.

What this means is that if you have, say, £75,000 stashed in an account run by a bank covered by the Irish compensation scheme, and that bank went bust, you would get £75,000 back. If you had £75,000 in a UK-based high street bank, you would only be guaranteed the first £35,000.

Previously, the Irish compensation limit was €20,000 (£15,800), which meant as a UK saver with money in accounts run by Irish banks, you would have had to claim this much in Ireland, topped up to a maximum of £35,000 by the UK Financial Services Compensation Scheme. Now, though, you would go straight to the Irish scheme.

The new rules apply to, among others, Bank of Ireland and Anglo Irish Bank, both of which are open for business in the UK.

If you are one of the thousands of people who has money in the Post Office's popular Instant Saver account, you may or may not know that this account is provided by Bank of Ireland, as are the Post Office's Growth Bonds and its Fiveyear Saver. Its recently-launched cash ISA,  paying 6.25%, is provided by Family Investments, but the deposits are held by Bank of Ireland and so, again, you are covered under the more generous Irish scheme.

The new regime is also good news if you are one of the 140,000 UK savings customers of Anglo Irish Bank, which launched savings products in this country five years ago and regularly features in the "best-buy" tables. Its most attractive offerings include fixed rate bonds paying 7% and the Easy Access Account paying 6.4%. Anglo Irish says the new higher limits are "great news" for all its UK savers.

The changes may mean that some of you with large-ish sums to invest will feel safer with an Irish bank than with a UK one. Legislation is being introduced to implement the new €100,000 limit, but the change will be backdated to September 20.

If you are enviously eyeing the gold-plated Irish scheme, then don’t be downhearted. There are proposals to raise the UK’s compensation limit to £50,000, which would apparently cover 98% of us with savings, and it has been suggested that this change could be made quite soon.

David Kuo, Head of Personal Finance at money website Fool.co.uk, said: 

“The Irish government has done the right thing to stand behind its financial institutions. Under the terms of the guarantee, savers and bond holders will be fully protected. 

“It is high time that Chancellor Darling stops dithering and safeguards the UK banking system too. The current Financial Services Compensation Scheme, which only provides limited protection per banking license, is not only out of date, but is unnecessarily complicated.

“Fool.co.uk has long called for a limitless guarantee to help restore confidence in our banks. To restrict compensation to just £35,000 while claiming that the banking system is robust is confusing for consumers. If UK banks are completely robust then Chancellor Darling must back them completely.” 

• Spread your savings around!

In the meantime, if you have got a fair bit of cash, spread your savings around a number of different savings institutions. And check who owns the bank or runs its savings operation, because in some cases you could be left out of pocket if you have your money in two or more savings providers that happen to be part of the same banking group, and this then went bust.

This can get complicated so we will try to do our best to explain it:

· Six HBOS-owned or run savings providers (Halifax, Bank of Scotland, Birmingham Midshires, Intelligent Finance, Saga and the AA) all share the same Financial Services Authority "authorisation", which means if you have money in two or more of these, you would, in the event of HBOS going belly-up, only get one helping of the £35,000 compensation. But Sainsbury's Bank, a joint venture between HBOS and Sainsbury's, has its own authorisation.

· NatWest, Royal Bank of Scotland, Tesco Personal Finance (a joint venture with the supermarket giant) and Coutts are all part of the Royal Bank of Scotland group, but each one is separately authorised. However, Direct Line (another arm of the group) shares its authorisation with RBS.

· Lloyds TSB and HBOS currently have separate authorisations, though it is unclear what will happen once the HBOS takeover by Lloyds TSB has taken effect.

· Alliance & Leicester is being taken over by Spanish bank Santander, which owns Abbey, though it looks like the two UK banks will retain separate authorisations. However, Abbey's online bank Cahoot shares Abbey's authorisation.

· The Derbyshire and Cheshire building societies are being taken over by the Nationwide in December, and they will then share the bigger society's authorisation.

Are your savings institutions part of the same banking group? Find out here.

So, with the level of security from the Irish banks much greater than UK  ones, are you going to switch your savings?