MSE News: Savings loophole allows under-35s to earn 5%

Former_MSE_Guy · 11 January 2010 at 4:18PM

This is the discussion thread for the following MSE News Story:

"A loophole allows non-homeowners under 35 to earn a market-leading 5% before tax on an easy access savings account ..."

Read the full story:
Savings loophole allows under-35s to earn 5%

Also see:

My blog on the nightmare of trying open this account

Gambit · 12 January 2010 at 2:19PM

I opened one of these accounts a few months ago and so far no problems. Despite Abbey/Santander being pretty bad at customer service, this was surprisingly set up pretty quickly and I've set up a Standing Order to the account meaning I can change the amount I pay in every month (between £100 and £300 that is) if and when I want to.

So big thumbs up from me! :T

liamcov · 12 January 2010 at 2:39PM

When is says the rate is variable does that mean they can give me a much lower rate when i've applied?

Also is there a mininum period for keeping the account or can I withdraw all the money whenever I want?

Another Q...I have £2,500 in my ISA now at 3.01% would I be able to & better off (interest wise) putting £2,000 in this account at first then £100 per month after, would I get more interest this way considering I don't pay tax but i'm assuming they take tax off first and I have to claim it back?

Or am I better off sticking with my ISA for the easiest?

Thanks for any help!

anselld · 12 January 2010 at 2:41PM

Has anyone succeeded in paying in a larger amount in one month as originally suggested here ?

Reaper · 12 January 2010 at 3:03PM

liamcov wrote: »

When is says the rate is variable does that mean they can give me a much lower rate when i've applied?

That happens with loans when you might not get the advertised rate but for savings everybody gets the same rate. What is means is that they have the option of lowering the interest rate (for everybody) in the future.

Another Q...I have £2,500 in my ISA now at 3.01% would I be able to & better off (interest wise) putting £2,000 in this account at first then £100 per month after, would I get more interest this way considering I don't pay tax but i'm assuming they take tax off first and I have to claim it back?

If you don't pay tax you don't need an ISA. Whichever savings account you get tell tem when you open it you don't pay tax and they will give you a form to fill in (R85) which means they won't then deduct tax from the interest payments they give you.

The only reason for you to have an ISA is if you are expecting to pay tax in the future and want to use your current year's ISA allowance.

Sillychuckie · 12 January 2010 at 11:46PM

Whilst it does make for a better headline, I'd hardly call this a 'loophole'.
The terms of the account are very clear, and have been from day 1. I have had it for a year now (got it shortly after it started), and made it very clear to them that I would never want to use the money for a home, nor would I ever take a mortgage with them. They didn't seem to care either way.
It is a great account and I'd thoroughly recommend it. I wouldn't however ever suggest that I was making the most of a loophole. Im sure Abbey are well aware and expectant of the fact that a fair proportion of customers opening this account have no intention of using it for saving for a home (or will not take a mortgage out with them), despite the account name.

SC

Mikeyorks · 13 January 2010 at 12:01AM

Sillychuckie wrote: »

Whilst it does make for a better headline, I'd hardly call this a 'loophole'.

I'd read it twice to understand where the 'loophole' was .... and was no wiser. Agree with you fully - how is meeting the T&Cs any sort of loophole.

liamcov wrote:

can I withdraw all the money whenever I want

....... the mortgage chat has to come first.

stphnstevey · 13 January 2010 at 1:36AM

Do they credit check you to prove you haven't got a mortgage?

thepearce · 13 January 2010 at 10:13AM

I see you have to be under 35 for this account. I was wondering what happens if you reach 35 whilst having the account open.

A quick glance at : http://www.santandergbm.com/csgs/Satellite?c=GSDetalleProducto&cid=1210614770668&idParent=1210614769309&pagename=Abbey%2FGSDetalleProducto%2FGS_DetProducto seems to indicate the age rules apply only at the time of opening the account.

First Home Saver
(Special Issue 1)

Legal details

Specific Terms and Conditions – First Home Saver (Special Issue 1)
Please see below for the specific Terms and Conditions that apply to the First Home Saver (Special Issue 1) which is a limited issue and may be withdrawn from sale without notice. Our Savings Account General Conditions and Services with Security Features, will also apply to any contract between you and us for this product ,in addition to any other conditions which are implied by law, even if they do not appear in these Conditions.
1 Eligibility
To be eligible for the First Home Saver (Special Issue 1), you must at the time of taking out the First Home Saver (Special Issue 1):
i. Be aged between 16 and 35 years of age.
ii. Be a non-home owner and first time buyer.
iii. Deposit between £100 and £5000 on account opening.
iv. Be able to credit between £100-£300 each month after account opening by standing order.
v. Agree to attend a full mortgage interview.
vi. Customers are only allowed to hold one First Home Saver (Special Issue 1) account
2 Initial Deposit
You will need to deposit between £100 and £5000 on account opening.
Additional deposits of between £100 and £300 will need to be made each month via standing order. You may vary the amount that you deposit each month as long as it remains between £100 and £300. If you deposit more than £300 in a single month we reserve the right to close your account.
3. Maximum deposit
The maximum deposit is £50,000.

dov · 13 January 2010 at 12:47PM

stphnstevey wrote: »

Do they credit check you to prove you haven't got a mortgage?

Where does it say in the t&c about not having a mortgage? As far as I can see it only talks about:

ii. Be a non-home owner and first time buyer.

Otherwise people who have bought a home without a mortgage could apply.

ginvzt · 13 January 2010 at 4:02PM

How would it work if OH is 36, but I still have few years to go? Also, we did have a house, which we sold about 1.5 years ago - do you think we could still be able to get this account (or at least me alone in my name)?

MSE News: Savings loophole allows under-35s to earn 5%

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