MSE News: Santander safety Q&A: your questions answered

Former_MSE_Helen

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

"Santander has explained its structure to help calm fears over the safety of UK deposits ..."

Read the full story:
Santander safety Q&A: your questions answered

Newbie2saving

Maybe a totally silly question (and the least of people's worries), but say you had £80k in a 3% aer paying savings account and the bank did go under, would you be entitled to your capital plus interest under the FSCS protection?

innovate

If the Icesave debacle is anything to go by, you will get interest up to the date the bank is declared insolvent. You receive up to £85K guaranteed.

The FSCS would publish detailed claims procedures etc.

Former_MSE_Dan

Good question The £85,000 limit includes interest yes, so to be safe and ensure everything is protected you are best to stick a bit under the £85,000 so that interest earned won't topple you over the line

Dan

peterpork

I don't think you mention Cater Allen Bank, which is also owned by Santander? I guess the same 'UK rules' apply?
Thanks

CoolHotCold

It's a whole lot easier to think of them as two separate banks owned by different entities.

Spanish banks are in dire straights and looks like a Bank Run is under way in some banks, the UK financial intuition is pretty healthy and the chance of Santander UK going bust is about the same as RBS or Halifax in the short term.

Former_MSE_Dan

I don't think you mention Cater Allen Bank, which is also owned by Santander? I guess the same 'UK rules' apply?
Thanks

Yep, Cater Allen is owned by Santander UK. It actually has its own FSA licence number though, that means it doesn't share its £85k/person protection with the main Santander UK group.

So in theory you could hold £85,000 in Santander and £85,000 in Cater Allen, all in 100% safety.

Dan

Nicholas-bloody-Parsons

The £85 grand limit is all very well, but if the worst does happen you may not be able to access your cash for some considerable time; months or possibly years. Some people are still waiting for the Icesave cash!

It is difficult to say what actually will happen. It is likely all accounts will have to be frozen. It will take some time to sort out those assets.

Bust is extremely unlikely; it is more likely that any bank will be fully nationalised like Northern Rock.

innovate

I like facts a lot, so I went to try and find the credit ratings of all the UK banks. It doesn't appear to be easy to get hold of this information without a paid subscription, but I found what looks a reasonably up to date table from before yesterday's Santander UK downgrade:

http://www.moneysupermarket.com/c/news/how-safe-is-your-bank/0003043/

Not sure how valid this table is - does anyone have anything better to hand? Assuming though it is valid:

Moody's downgraded Santander UK to A2 yesterday - - bringing Santander UK on par with a whole lot of other UK banks, such as BoS, BM, Halifax, IF, LLoyds and Nationwide. A2 is still a lot better than many other banks.

Also, Moody's aren't the only game in town. Fitch and S&P have a view too. More importantly though, the markets do have have views too, often a lot more timely and a lot more precise than Ratings Agencies. According to the FT, things aren't looking terribly awful today for the spanish banks (just awful, lol!).

EDIT: That FT link doesn't work directly for some reason, but you should be able to get to it if you google this link, then select the first entry on the list.

innovate

Nicholas-bloody-Parsons wrote: »

Some people are still waiting for the Icesave cash!

All retail investors have received all their money years ago.

NPowerUser

For folks with a Santander mortgage on their 4.24% SVR, perhaps the picture is less clear.

A raft of lender pushed up their SVR's recently but Santander was not one of them.

I suppose the cynic in me thinks, that as Santander UK has been downgraded by the Credit Agency, if the cost of borrowing will increase in the wholesale market to them, then surely customers will end up paying more on their mortgage to cover the higher charges?

How long will the SVR stay at 4.24%?