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

jamesd

bigcheese, thanks, I didn't know just how theirs was organised. I think you're right that it'll be fully set off, eliminating the liquidity but protecting an unlimited amount of money.

A more flexible product is the one from First Direct if this ever matters to you. That has both a mortgage account that you can pay into and withdraw from up to the agreed facility, like the Santander one, and different offset savings and current accounts. So you can put up to £85,000 into those two different accounts to protect liquidity and any more into the mortgage account to protect it at the cost of liquidity. There are probably others that work similarly, I just happen to know about this one.

Munkeh

Right, can't find this answer, so here's the question...

IF the Spanish parent company goes bust, does that automatically mean that the British banks will close?

Or is it likely that the British banks will stay trading as 'normal'?

I must be a small percentage but my experience with Santander has been fine, the customer services have never been poor imo, so switching banks isn't terribly appealing.

I would be quite happy to stay with Santander unless we were in a Northern Rock position, but it doesn't seem like we are if you read between the scaremongering.

jamesd

The British bank can stay trading as normal but it would probably eventually be sold to help to reduce the debts of the parent. It would continue operating under the control of the buyer and the account holders would see gradual changes in account terms and conditions to match those of the new owner.

Munkeh

Thats what I needed to know. thanks.

mark49152

I had three accounts with failed banks in 2008 - Icesave, Bradford & Bingley and Kaupthing Edge.

Apart from stressing about it, some minor inconvenience and some short-term loss of interest, I didn't lose anything and it really wasn't a big deal. Only Icesave required some paperwork, which IIRC was done online and was quick and easy. The B&B and KE accounts just morphed into ING and Santander accounts. In hindsight I stressed about it a lot more than I needed to.

I trust the FSCS. As has been pointed out here, failure to honour the FSCS is inconceivable as it would cause far worse disaster. I'm more concerned about my savings being devalued if they have to print money to do it.

tangoc

I have just called Santander and they have told me that should something 'happen' to them then my offset savings would automatically pay off my mortgage and leave me with a smaller debt BUT no savings. I have asked them for this in writing as I was under the impression that the FSA would cover up to £85000 per person if the 'savings' were in a seperate account. Has anyone any info on this??

jamesd

The FSA will pay you nothing, it isn't the body that pays out for this. The FSCS has changed its policy and the answer you were given is the old answer, not the new one, unless your mortgage operates like a big overdraft, with all savings and mortgage kept in exactly one account.

MiserlyMartin

Well I've withdrawn all of the substantial amount I had in there, out of there. Yes the FSCS covers me but thats not the point. That bank doesn't deserve my money and if it adds to the total bank run lets bring it on.

I'm fed up of banks using savers money to lend irreponsibly against overpriced assets, the quicker the whole ponzi scheme goes down the quicker we can all reset and work out from this recession. At the moment its all bail out and borrow and print rather than default from the governments