Santander 123 account fee increasing to £5 from January

bxboards

Nick_C wrote: »

In my case yes. A life time tracker at BOE base rate + 2% with no arrangement fee and the ability to overpay at any time without penalty was the best deal I could find. So the £7 a month cash back in addition really is a great bonus.

Clearly the 123 account will no longer suit everyone, but for many it is still a really great deal.

So that works out well for you but I can certainly see why for some people paying a fiver a month will make them look elsewhere.

I have no mortgage (own outright), and use my 123 as a 20k savings account, so it certainly works out well for me, effectively the fee is a rate cut on the 3% saving. I get no where near the £2 current fee for cashback with bills etc.

Still a very good deal for me - however there are plenty of other accounts with no fees paying 3% or 4%, albeit with on smaller amounts. For anyone not maxing out the 20k savings I think other accounts are worth looking at, Halifax pays £5 a month with 2 DDs set up for example, so with a generally low bill like a mobile phone contract that makes sense to keep that outgoing with Halifax rewards rather than in a 123 (£5 credit from Halifax vs a few pence at 3% from the 123)

Nick_C

Absolutely agree. I've got 5 current accounts with 4 different banks. My main account used to be with Halifax. I keep it going for the £5 a month but leave a minimal balance in there. I have my pension paid in there but immediately transfer most of it out to Santander by SO. The 2 DDs are for my Halifax Mastercard (another £5 a month, roughly 1.6% cashback) and Boots Opticians, so no point in moving these STOs to Santander.

People must do the maths and make a proper rational decision based on what works for them. No point in getting annoyed with the banks when they take action on accounts that aren't delivering a profit.

With the lowest ever rates of inflation and interest at 5% readily available, savers have never had it so good.

joe134

Nick_C wrote: »

Absolutely agree. I've got 5 current accounts with 4 different banks. My main account used to be with Halifax. I keep it going for the £5 a month but leave a minimal balance in there. I have my pension paid in there but immediately transfer most of it out to Santander by SO. The 2 DDs are for my Halifax Mastercard (another £5 a month, roughly 1.6% cashback) and Boots Opticians, so no point in moving these STOs to Santander.

People must do the maths and make a proper rational decision based on what works for them. No point in getting annoyed with the banks when they take action on accounts that aren't delivering a profit.

With the lowest ever rates of inflation and interest at 5% readily available, savers have never had it so good.

It's better now than back in 1993 when I got 17% interest from my Coventry Account, BUT, inflation was 21%+, and no switch freebies, which I've only done one , a few months ago to ,Halifax £200..
I had one A/c then, Hsbc, which I've still got(,55 years now), also have another?? (I've lost count, without my little black book;:umpteen)),including 3 San123's, and just opened 4 Tesco last week.God help the Wife, if I snuff it, sorting them all out, even though it's all written down.
If we both go, the kids will have to work for their inheritence.
Finders, keepers:rotfl:

Spidernick

Archi_Bald wrote: »

It may no longer be viable for them, even if it still is for you.

True, but according to this poll over 70% of people will still benefit:

http://www.moneysavingexpert.com/poll/16-09-2015/santander-123-customers-how-much-cashback-do-you-get

I get the impression that a lot of people are now dismissing the account without fully thinking things through. I might be wrong, however.

Consumerist

Spidernick wrote: »

. . . I get the impression that a lot of people are now dismissing the account without fully thinking things through. . .

The problem with an increase in the fee is that it affects those with smaller balances disproportionately. It is likely to be those with small balances and low cash-back who will be looking elsewhere.

Archi_Bald

Spidernick wrote: »

True, but according to this poll over 70% of people will still benefit:

http://www.moneysavingexpert.com/poll/16-09-2015/santander-123-customers-how-much-cashback-do-you-get

I get the impression that a lot of people are now dismissing the account without fully thinking things through. I might be wrong, however.

I get the impression that a lot of people just made something up in that poll. Certainly those 28 who claim to get more than £83 a month in cashback.

bxboards

Archi_Bald wrote: »

I get the impression that a lot of people just made something up in that poll. Certainly those 28 who claim to get more than £83 a month in cashback.

I have two, and get around 95 per month.

Although I assume the question was regarding only 1 account so I answered between 400 and 500 a year, or whatever the option was.

The question is in the survey is poorly formed in my view, as it's possible to have more than 1 123 account.

Archi_Bald

bxboards wrote: »

I have two, and get around 95 per month.

Those will cost you £120 from January onwards.

Do you have particularly massive phone bills? It takes a lot of huge bills to get even over £20 cashback a month.

bxboards

Archi_Bald wrote: »

Those will cost you £120 from January onwards.

Do you have particularly massive phone bills? It takes a lot of huge bills to get even over £20 cashback a month.

I know - I'm just treating is as an effective interest rate reduction.

There isn't anything better around for me - the regular savers at 5% or 6% only pay around 3% over the year and you can't put much in them. And ISAs don't come close at the moment. Obviously I'd much rather pay £2 per month per account than £5.

My bills generate less than £2 a month on average - I just realized I mis-read the survey question, as I included my interest too...!

Archi_Bald

bxboards wrote: »

the regular savers at 5% or 6% only pay around 3% over the year and you can't put much in them.

Please don't stir up that old chestnut again. Regular savers pay precisely the AER they say they pay. It goes without saying that you won't get interest for money that isn't in an account but the AER is unaffected by how much you can pay into an account.

Aside from that, you can stick £1,450, or even £1,800 if you have access to KRBS, a month into these Regular Savers. That's at least £17,400 a year. By dripfeeding the regular savers from a 3% AER account, you can achieve a return (not an AER!) of over 4% (before tax) for this sum of money. You can use the MSE dripfeed calculator to work out the sums.

bxboards wrote: »

And ISAs don't come close at the moment

true for cash ISAs. Probably not true for S&S ISAs, although I appreciate those are not much use if you need your cash in the next 5 or so years.

bxboards wrote: »

My bills generate less than £2 a month on average - I just realized I mis-read the survey question, as I included my interest too...!

I suspect you are in good company. Lots of people will probably have mis-read the Q.