Santander UK stability

alanjb50

Some questions to our financial experts, please, about Santander UK stability and the eurozone issues.
Background:
I opened a two year Santander ISA at 4% fixed interest a month ago and transferred in all my ISA savings. Penalty for early closure of this ISA is 120 days' interest which I suppose is levied somehow even if not yet earned?
I read and hear that the UK bank is 'ring-fenced from its Spanish parent' and that 'amounts up to £85K are protected'.
I'm minded, at least for now, to leave the deposit alone and avoid the penalty.
Questions:
1 (a) What would I need to do to recover my 'protected' deposit if I were no longer able to access it from Santander due to the above problems, however unlikely that might seem today in the light of reported UK Arm stability? (b) Would I lose any or all of the interest accrued? (c) Would the 'closure' penalty be waived?
2 Under what if any circumstances arising from those euro-problems could I lose part or all of my deposit?
A bit long, so thank you if you read this far.

Rafter

Rather than rely on a forum, I suggest you look at the FSCS website which will give you details about the process.

http://www.fscs.org.uk/

R

innovate

alanjb50 wrote: »

1 (a) What would I need to do to recover my 'protected' deposit if I were no longer able to access it from Santander due to the above problems, however unlikely that might seem today in the light of reported UK Arm stability?
(b) Would I lose any or all of the interest accrued?
(c) Would the 'closure' penalty be waived?

1a - the FSCS would tell all depositors what to do
1b - going by what happened with the Icesave bancruptcy, there is a chance that you might lose some interest
1c - most likely yes

alanjb50 wrote: »

2 Under what if any circumstances arising from those euro-problems could I lose part or all of my deposit?

None, as long as you do not have more than £85K in the Santander Group.

rockitup

I seem to recall that Fixed Rate savings bond holders with the UK branches of Icelandic banks had a choice of withdrawing their funds at the time that FSCS released compensation, or to leave the fixed term to expire on agreed date and the interest was to be paid in full.

However that was over 3 years ago and things may not be the same next time

Sauveur

Do ISAs still retain their ISA status?

innovate

Sauveur wrote: »

Do ISAs still retain their ISA status?

They did when the Icesave debacle happened. People got an ISA certificate which they could take to their new provider as proof that their money used to be in an ISA. The FSCS would tell people what precisely will happen when, and what people should be doing by when.

It makes sense that you can keep your ISA status - - it is a tax excemption, independent of the provider. Just because the provider goes bellies up doesn't mean you would lose your tax excemption.

Hopefully you will never need to find out that I got this right ;-)