Santander First Home Saver interest issue

KI2000

Hi there!

I received notice of my First Home Saver interest amount today (paid in July for anniversary of opening) and it is not as much as I expected.

I feel I'm not too bad at working out interest, and worked out interest in advance for relatives for the same account within £2 of the actual amount so to find out I received £100 less than expected is a worry. I was wondering/hoping others might have ideas where they interest was calculated, whether they agree with my calculations, and what steps I should take if I am correct.

I was expecting around £272 (£340 before tax) but only received £172.61 (£215.76 before tax). My reasoning being £5000 + ((12 * £300) / 2) is the "average" amount. Multiply this by 0.04 (5% pre-tax, 4% post-tax) and you get £272.

Looking at it again, maybe it should only be £266 as I was counting 12 lots of £300 in addition to the original £5000 deposit instead of 11 (I was told to pay the first £300 the month after the deposit - I hope this is right). If I was penalised in the first month for not making an additional payment, I think it should be only as low as £250.


My saving amounts:

03/07/10 £5000 deposit
02/08/10 £300 saving
02/09/10 £300 saving
04/10/10 £300 saving
02/11/10 £300 saving
02/12/10 £300 saving
04/01/11 £300 saving
02/02/11 £300 saving
02/03/11 £300 saving
04/04/11 £300 saving
03/05/11 £300 saving
02/06/11 £300 saving

My statement says at 04/07/11, my balance was £8300. Interest was applied and another £300 was deposited.

I appreciate any feedback. Any ideas?

hermante

Can't say what's going on, but by my calculations you should have got £326.05 gross or £260.84 net. Otherwise the interest you got also works out as earning 0.1% from opening until 30 Nov then 5% from 1 Dec onwards.

rb10

You are correct in your calculations.

Question it with Santander, ask how they arrived at that figure. Don't be afraid to go down the official complaints route if they are not helpful.

And please post back here when you get a reply - I'd be interested to see their response.

lewistye

As previously posted, please let us know how you get on. My account's anniversary will be next March but I had already worked out exactly the same figures as you (using the rough "average" method for the £300 payments).

Good luck!

beefturnmail

Hi KI2000,

The same thing happened to me - it's because Santander's systems can't cope with payments which fall on bank holidays and week-ends and therefore doesn't 'recognise' the payments for the month where this happens, so the interest rate reverts to 0.1% for the month.

Ring Santander and ask for a month by month breakdown of interest so you can see if this is indeed what's happened. They gave this to me so they can do this. I queried this and the guy on the phone agreed it was wrong and that it would be corrected.

However (in typical Santander fashion) this was not done, which I didn't find out until I got the next statement 3 months later! I then wrote a letter through the official complaints procedure and received a fob off letter.

I then e-mailed Ana Patricia Botin (CEO) at and it was sorted within a day by 'executive complaints' plus £50 compensation.

Santander CEO e-mail is: [EMAIL="CEO@santander.co.uk"]CEO@santander.co.uk[/EMAIL]
I also have the name, e-mail and direct dial of someone in executive complaints, so let me know if you have problems.

Also see this thread and my posts on pages 6-8:

https://forums.moneysavingexpert.com/discussion/2528485

Good luck!

gadgetmind

Hmmm, we got a statement lately and it was also less than expected. I'll fish out all the old statements and check against my spreadsheet.

KI2000

Cheers guys for the feedback. I want to hunt out the previous statements and documentation I was given in order to fully prepared when I ring up. I will, of course, update this thread on the outcome.

I'm hoping that as this has happened previously they will be able to quickly identify the issue, but I would also have hoped they would have fully resolved the issue.

Bin_Boy

Hi, there are two things:

a) as beefturnmail says their system doesn't cope with bank holidays;
b) while they advertise the interest as being 5% in any calendar month where you make a payment and many people are advised to set up a payment mid month on account set up, their system actually calculates it on a monthly basis from account opening eg. if account was opened on 18th you must only have one payment in between 18/07/11 and 18/08/11.

This means that the bank holiday issue causes real problems they often pay only the penalty rate rather than the correct rate as advertise.

I suggest asking for the monthly breakdown, and then going through the formal complaints system, which is what both I and beefturnmail have done successfully. If you try and discuss it in detail with their normal contact centre, you'll go in circles and spend all the interest on the call....

Hope that helps.

KI2000

Hi there!

An update on this issue:
I have just rang up Santander. I explained the issue and the customer services rep said she was unable to calculate the interest herself but she put a request in for someone with expertise in the area to run through the calculations. I did try and press her to at least see the figure was definately wrong rather than me just querying the exact accuracy of the calculations, but she said she wasn't supposed to which I can understand.

I mentioned the bank holiday issue but she was very dismissive of it. I mentioned other people had been told this over the phone before but she said it wouldn't affect it. She did, however, put a note in with the request about this.

They said I would receive a text message to confirm the request in a couple of minutes and then another within the week to announce they have looked at the figures and are posting an updated letter. I haven't received a text yet (it's been around 30 minutes) but hopefully it will come through soon.

I can only take them at their word so far and so I am hopeful that this will be resolved.

gadgetmind

Please can someone check my working. We opened an account with £5000 and have paid £300 per month into it. I have a spreadsheet that applies 0.40741% interest per month and totals everything. After 12 months, I get the total interest (compounded) to £352.14 yet Santander have only paid £329.08 in interest.

Ark_Welder

gadgetmind wrote: »

Please can someone check my working. We opened an account with £5000 and have paid £300 per month into it. I have a spreadsheet that applies 0.40741% interest per month and totals everything. After 12 months, I get the total interest (compounded) to £352.14 yet Santander have only paid £329.08 in interest.

Does the interest compound monthly? Working out the interest on a daily basis and adding at the end of the year (I've assumed regular days in the month for the contributinos) then I calculate closer to the Santander figure.

So, £5000 has interest of 5% x 365 / 365 applied,
Month 1 £300 has 5% x 335 / 365 applied
.
.
etc