Santander 123 account fee increasing to £5 from January

eltee139

I suspect that Santander's revised fees for 123 account customers might be an attempt to rationalise multiple accounts? If you have under £20k spread across two of these accounts, then you'll be hit with a double whammy when your fees go from a total of £48 to £120. If you close one of the accounts and put your money in the one remaining account, you'll halve the fee (a relative increase of £12 a year is better than an increase of £72, after all) but you'll keep the same interest rate. I don't know what it costs Santander to administer multiple accounts, but I imagine there'd be some saving for them if they can get enough customers to rationalise accounts? Of course, if you've got £40k plus, it still pays better than almost anything else out there at the moment. If you've got under £20k and two Santander 123 accounts, it might be worth considering switching one account to a different deal - like TSB's Classic Plus account (offering 5% gross on up to £2k) - but I've not crunched numbers on that yet.

013cqbche

davedee65 wrote: »

I also changed to the 123 account from my standard account about 3 weeks ago after being badgered about the benefits every time I visited my local branch!

The price increase was never mentioned at the time. Surely the staff would have been aware of the upcoming rate increase? I feel that I have been miss sold an account or at least not been given all the correct information to make an informed decision?

Is there not a legal case here?

It was leaked to the press a little earlier than anticipated, most staff found out the same time the consumer did.

aphty

eltee139 wrote: »

I suspect that Santander's revised fees for 123 account customers might be an attempt to rationalise multiple accounts? If you have under £20k spread across two of these accounts, then you'll be hit with a double whammy when your fees go from a total of £48 to £120. If you close one of the accounts and put your money in the one remaining account, you'll halve the fee ) (a relative increase of £12 a year is better than an increase of £72, after all) but you'll keep the same interest rate. I don't know what it costs Santander to administer multiple accounts, but I imagine there'd be some saving for them if they can get enough customers to rationalise accounts? Of course, if you've got £40k plus, it still pays better than almost anything else out there at the moment. If you've got under £20k and two Santander 123 accounts, it might be worth considering switching one account to a different deal - like TSB's Classic Plus account (offering 5% gross on up to £2k) - but I've not crunched numbers on that yet.

My issue related to this (amalgamating 2 accounts; my wife's tax free sole account plus my joint account with her, to halve the coming fee increase up to £72) concerns the Santander linked accounts we have. There are two 2.3% fixed rate cash ISAs, one linked to each current account, a joint 2.39% 123 mortgage we have and a 123 Credit Card account linked to my joint account with my wife, for which she is an additional cardholder.
The vast majority of the interest earned is on my wife's sole account and the vast majority of the cashback earned is on the joint account. But if I close the latter and move the direct debits across to her sole account, I think we'll lose access to one of the linked 2.3% ISAs (with 20k in it) plus the Credit Card. My wife could apply for the credit card in her name but this will be subject to the increased fee of £36 rather than £24 and with the capped cashback limits. I think the joint mortgage we have, with monthly payments from my wife's sole account, would be unaffected.
Am loathed to accept the double whammy when fees go from a total of £48 to £120 but can't see how I can mitigate this without losing out by closing one of the accounts. Any ideas?

colsten

What do the T&Cs of your linked accounts say? Do they stipulate that you must hold the 123 for the life of the linked account? What if any penalties do the T&Cs state?

carmina_piranha

tizerbelle wrote: »

I've always wondered how MSE worked out the "LOW" figures for the annual cashback over the years. Whenever I have checked the figures with my DDs I have never been able to get above about £50 cashback a year - meaning £26 after the annual fee of £24. Currently the most cashback I would get is £45 before the annual fee is applied not after as their table predicts.

Judging by answers on here, most people pay higher council tax than I do. I always assumed that those getting more than £5 in CB had ridiculous mobile and TV packages, but perhaps not.

I should think myself lucky that my bills, even when paying mobile phone for my husband too, are low enough for me to not make £5 per month :T

For me I don't think this account is worth keeping, although I'm going to look into it at the weekend. For those getting interest on savings rather than just on the first few days after their salary gets paid in then it's probably worth keeping - likewise for those getting CB for having a santander mortgage.

I'm getting £5 a month off Halifax, and £12 a month off barclays which is £9 after paying £3 fee. £5 of that is for having my mortgage with them. I suspect that I'd be better off using a tesco account, but for those who are better of sticking with santander, fair enough I'm not going to moan - I've had a profit from Santander this past year :beer:

gt94sss2

Will be interesting to see how many customers leave Santander for the new RBS/Natwest 3% cash back account.

At £3/month it will be cheaper than Santander and offer more cash back (i.e. a flat 3% rate) though Santander still looks the better option for those who use it as a savings account.

Regards
Sunil

Nick_C

gt94sss2 wrote: »

Will be interesting to see how many customers leave Santander for the new RBS/Natwest 3% cash back account.

At £3/month it will be cheaper than Santander and offer more cash back (i.e. a flat 3% rate) though Santander still looks the better option for those who use it as a savings account.

Regards
Sunil

Even without using my 123 account as a savings account, there is no incentive for me to switch to NatWest as I also get cashback on my Santander mortgage.

I could make an extra £3 a month by opening a NatWest current account and moving some of my DDs to it, but I don't think its worth the hassle, unless NatWest are offering any other perks.

djpailo

Despite being disgruntled, at least they've given us a fair few months to consider our options. Plenty of time to think things through and work things out for what is best for your situation.

Personally, the account will still work for me.

Neil_Jones

Nick_C wrote: »

On a separate point, I wonder how many people are getting unexpected cashback on the account? I used to have a gym membership with my local council which I paid by monthly DD. I got 1% cashback on this in addition to the 1% on my Council Tax. I expect Santander treat any DD to a local council as being for Council Tax. I wonder if any council tenants are getting cash beak on their rent?

Yep I live in a council property, pay the rent by Direct Debit and the Contents Insurance is done through a council scheme so that goes through the council, then there's the council tax.

1% cashback on the lot, and this on its own easily covers the current £2 fee and a bit more. It would appear that any direct debit payment made to a council for whatever reason (council tax, rent, gym, service charges, insurance, garages etc) are all seen as valid payments for 1% cashback.

I see it as a quirk of the system, or the Monopoly equivalent of "Bank error in your favour".

[Deleted User]

My gym membership is paid to an arm's length wholly owned subsidiary company of the local council, which means that no cash back is paid.