'How safe Is Santander UK? - What I really think' blog discussion

dots_thots

hashkey wrote: »

Would the government offer separate protection if you have personal savings and business savings with the same bank?

Read my earlier post. The government just promises to put the holders of the currency on the hook for the losses.

And for people running a business it offers the best interest rates.

In a free market (which we don't have) failure is the regulator so high interest rates would only be one of many considerations when choosing a bank.

According to the BofE, we need negative real interest rates of 7% to halve the national debt in 10 years. Since the inflation measures are nonsense, if you're getting less than 7% interest in a bank you are being pick-pocketed. And since interest rates are set in post, even if you match the inflation rate you are always behind, potentially by up to 12 months.

Everyone needs to keep some cash short-term, particularly businesses that need cash flow and liquidity. But be very wary of any long term cash holdings. Unfortunately we are all being forced to be speculators because cash is not trustworthy any more - it's being debased at an appalling rate.

ex-dmp

I don't believe what governments and so called experts anymore after the last bank financial fiasco. Nobody has a scooby as to what would happen after a bad eurozone breakup if it were to happen.

Reduced my exposure to Santander long ago.

mydogpickle

Many thanks Martin, a carefully worded and well-crafted statement that in the circumstances should reassure depositors and deter them from making ill-considered decisions, whilst maintaining a sense of balance and proportion overall.

You can do no more than that. I wish my sister had read your article before withdrawing a large proportion of her savings against my advice!

OFT licensed debt counsellor.

CleanShirt

hashkey wrote: »

Would the government offer separate protection if you have personal savings and business savings with the same bank? In this case the business is a small Ltd company with 1 director. Would the max protection be £85K for the company and another £85K for the individual? Thanks in advance.

For what it's worth, Santander UK seems to be one of the most solid and successful banks in the UK. And for people running a business it offers the best interest rates. I spent half a day looking for the best rates and only the Cambridge BS got close to Santander if you can tolerate the inconvenience of banking by post.

Each legal entity is covered, so you would get 85k and the Ltd would get 85k as they are separate entities, even with the same bank.

mlhill

Hi
We have a maxi ISA with Santander. What protection do we have?

jamesd

Your maxi ISA became two ISAs, one cash and one stocks and shares, when the mini/maxi distinction ended at the start of the 20089/9 tax year. You have £85,000 of protection for the cash ISA part, £50,000 for the S&S ISA part.

An S&S ISA would typically not have the investments held by the company that you paid the money to but the money would normally be passed on to the companies where the investments are made. So in a typical S&S ISA the protection is much greater than it appears because it's spread over so many investment companies.

jrawle

The new limit for the FSCS was brought in to be uniform across the EU, at €100,000. At the time, the equivalent in pounds was £85,000.

€100,000 is now worth only £80,000.

How often, if at all, will the FSCS re-evaluate their limit to bring it back into line with the limit in euros? If the euro continues to devalue, the limit could end up being £70,000 or less, meaning anyone who is close to the £85,000 limit could lose out.

hashkey

CleanShirt wrote: »

Each legal entity is covered, so you would get 85k and the Ltd would get 85k as they are separate entities, even with the same bank.

That's good. Thank you. :beer:

maria28_2

jamesd wrote: »

Not if they are classed as investments instead of deposits. The investment limit is £50,000, not £85,000. Santander should be able to tell you which limit applies.

I have an Investment ISA and also a Direct Share Investment Plan. I have received a letter from Santander which states "The cover depends on the nature of the claim being made, eligible claims for most types of investment business are covered up to a maximum limit of £50,000 per person. FSCS cover is not available on investments for loss of money resulting from performance of the investment.

My problem is I dont understand what it means. Does it mean that in the event of Santander going brankrupt, my investment which is less than £50k is safe? What do they mean by 'investments for loss of money resulting from performance of the investment'?

I am worried, do I need to take out my investments & save it as cash because my cash total is below £85k.

John_Pierpoint

maria28 wrote: »

I have an Investment ISA and also a Direct Share Investment Plan. I have received a letter from Santander which states "The cover depends on the nature of the claim being made, eligible claims for most types of investment business are covered up to a maximum limit of £50,000 per person. FSCS cover is not available on investments for loss of money resulting from performance of the investment.

My problem is I dont understand what it means. Does it mean that in the event of Santander going brankrupt, my investment which is less than £50k is safe? What do they mean by 'investments for loss of money resulting from performance of the investment'?

I am worried, do I need to take out my investments & save it as cash because my cash total is below £85k.

If you hold investments whose price is determined by the quotation on a free market and the market price of your investment goes down - generally speaking that loss is your problem [Unless you can demonstrate that when the investment was sold to you, you were seriously misinformed about the nature of this market risk].

Usually such investments are legally held at arms length from the institution (as they are not the beneficial owner) so if the bank was to go bust the investments should still exist earmarked as yours. The last European bank to go bust, seriously effecting small UK depositors, was the Luxembourg registered BCCI (Bank of credit and commerce international - Bank of cocaine and conmen international)
http://en.wikipedia.org/wiki/Bank_of_Credit_and_Commerce_International

If you are a shareholder in Santander those shares have gone down in value.
[Similarly if you hold £50 notes in a sack under the bed, they are going down in value; last year the value of the pound went down by about 5% - that is "puff" the value of one pound in twenty gone to money heaven.]