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

whiteside

Very true ses6jwg. I bank with Santander and am not overly concerned. Im not sure where I would move my money that would be any safer. If things really got that bad, which I dont think they will unless everyone starts to panic, then as ses6jwg stated there will be more pressing concerns. And for anyone who thinks keeping cash under the mattress is wise, if things really went to the wall, then it's likely the best use would be to burn it to keep warm. Lol. Let's just keep calm and carry on.

societys_child

Whiteside beat me to it.

and I'm not sure why there's so many references to Icesave, it wasn't even a British bank for goodness sake.

verntern

Customers of Santander online banking may have seen the 'reassuring' message from them after logging off. Didn't reassure me much. Made me think of the old wartime slogan 'Keep Calm and Carry On'.
I've kept calm and carried on filling out my ISA transfer request form to get out of Santander before the Spanish parent company begins to plunder Santander UK assets through the back door. Sure, Santander UK comes under the FSCS protection scheme. However, if Santander UK should go bust I wonder how long it would take FSCS to compensate AND how much hassle savers would have to go through to write letters, fill in forms just to rescue their money?

Hempsty

Are our savings safe if my wife and I have an offset mortgage with Santander for £210k, with £209k in the offset savings account?

If the bank went bust, could the mortgage debt be sold off independantly of the savings, leaving one entity holding our mortgage debt and another holding the savings putting them at risk of £39k? (£209k less £170 joint government guarantee).

Or - would our relationship with the bank be looked upon as an overall total debt of just £1k?

We have looked on the web site at paying off £39k, but the wording appears to indicate that this isn't possible, you can only pay into the offset savings account unless you are paying off the entire sum.

opinions4u

This changed on 31st December 2010.

If the savings offset and mortgage are accounted for independently then you will continue to owe the full mortgage debt but only have £85k / £170k of the savings covered by the FSCS.

EDIT Please read my post beow as this post is incorrect.

Hempsty

mmmm - 'IF' being the point in question.

Any idea how one can find out whether savings / loan would be accounted for independently?

innovate

If you are not able to find out whether they are accounted for independently, I would assume they are, if I were you.

Is there anything that forces you to keep your offset savings in Santander, or could you keep at least some of them elsewhere? If you aren't allowed to pay off your mortgage in parts, you could probably afford to tie up some money (say £40-£50K) in a fixed term account with another bank?

Do you both have cash ISAs? If not, you could probably stick 2 x £5640 into a Lloyds 3.7% 2 year ISA, funded from your Santander offset savings account. You then just needed to find a home for another £20-£30K in a normal savings account. Next April, use some of it to top up the Lloyds ISAs again if 3.7% is still tops, or put it in whatever is the best ISA outside Santander.

sabretoothtigger

Or - would our relationship with the bank be looked upon as an overall total debt of just £1k?

Maybe an accountant would know. I think its most likely they have to consider credit and debt together. Balancing the books
Getting your savings back is another thing if they really didnt have the money. I dont think they can choose to ignore money you are owed when demanding money from you, that would be ridiculous. All the same, better double check

Mr_K

Santander is one place I would never have my money but that's mainly because of their appalling customer service. Rates aren't everything.

However the same messages are coming out at the moment that came before there was a run on NR. True nobody lost any money but who needs the hassle ? There will be a limit to how much the UK govt. and/or the FSCS can pay out. Particularly if this goes really horrible and one bank follows another.

opinions4u

Hempsty wrote: »

mmmm - 'IF' being the point in question.

Any idea how one can find out whether savings / loan would be accounted for independently?

I'd say if they have separate account numbers .... Although the paragraph below isn't how I'd previously interpreted it.

http://www.fscs.org.uk/industry/sub-schemes/accepting-deposits/payout-arrangements-from-1-january-2011/

If a deposit account is separate from the mortgage balance, it would be dealt with separately and compensation would be calculated on a gross basis. However, if the deposit account is combined with the mortgage account and operated as one large overdraft, the FSCS would have to treat it as an overdraft and no compensation would be payable. It is important that consumers appreciate the difference between these accounts.

If the accounts are separate the FSCS would pay compensation up to the limit and the remainder would automatically be set-off against the debt (or in this case mortgage) under insolvency law.

In other words, you wouldn't lose a penny.