Best place for Savings?

wright39

Not too long ago, Mrs W and myself opened a Santander savings account each. Just as we were about to transfer our savings we heard the news about the downgrading of Santander's credit rating.

We have been toying with the idea for the past few weeks and have now concluded we're still going for the transfer due to the fact the UK arm of Santander is regulated by the FSA and because our savings fall under the limits for compensation.

Anyway this has got me thinking this morning that basically our money is probably as safe in Santander as it would be any other UK bank regulated by the FSA.

Therefore my question is, as my mortgage is with Santander and my savings are with Santander and they decided to swallow up my savings, would the administrators take my savings into consideration when arranging the repayment of my mortgage debt.

Dan.

Subology

You are right in thinking that your savings - anything under £85,000 - would be compensated if Santander went under.

atush

Usually the two are treated completely seperately should a bank fail.

But I would not let Santander's spanish heritage put me off if I was under the 85K compensation limit. What would put me off Santander is their completly awful customer service reputation. So do be aware of this.

soulsaver

Subology wrote: »

You are right in thinking that your savings - anything under £85,000 - would be compensated if Santander went under.

£170k on a joint account....

oldvicar

Savings of £85K - each - would be [eligible to be] compensated.

Any savings above that level wouldn't necessarily be paid out. But they would be offset against any debts (such as a mortgage in your name) which you have with Santander.

Apart from risking Santander's allegedly poor service, it can make sense to have savings with your mortgage provider since you essentially get a 'double' guarantee. Firstly you get the FSCS guarantee which everyone expects the government to provide for. And in the unlikely event that the FSCS guarantee isn't honoured or your savings are above the compensation level, then at the very least your debt is reduced by any amount which is not paid out.