Santander 123 account fee increasing to £5 from January

olip74

A point worth making for those doing the sums. It has been mentioned that new tax rules on interest earnings mean interest will effectively become tax free for most people from April '16.

With a 123 account, the level at which you would be no worse off than you are now under these new rules is ~£6k or to be more precise...

£6081 * 2.96% * 20% = £36 that HMRC would have taken.

Pincher

07/09/2015 1 Direct Debit Payment for Water at 1,00% Cashback £0.33 £21,173.58

07/09/2015 1 Direct Debit Payment for Gas & Elect. at 2,00% Cashback £2.18 £21,173.25

07/09/2015 1 Direct Debit Payment for Council at 1,00% Cashback £2.33 £21,171.07

07/09/2015 4 Direct Debit Payments for Comms at 3,00% Cashback £2.51 £21,168.74

07/09/2015 INTEREST PAID AFTER TAX 10.06 DEDUCTED £40.23 £21,166.23

07/09/2015 MONTHLY ACCOUNT FEE £2.00 £21,126.00
Soon to be £5.00, alas.


Verily, the lord giveth, and the lord taketh away.

michaels

This sort of thing annoys me, thinking you can get away with a 150% price increase because it is 'only' £3 per month. If the price of a loaf of bread went up from £1 to £1.25 would we we all just shrug and say 'only £1.25 per loaf?!

I hope Santander discover they have wasted all the money 'spent' on attracting customers as we can all switch away when they try it on with their pricing.

michaels

Pincher wrote: »

07/09/2015 1 Direct Debit Payment for Water at 1,00% Cashback £0.33 £21,173.58

07/09/2015 1 Direct Debit Payment for Gas & Elect. at 2,00% Cashback £2.18 £21,173.25

07/09/2015 1 Direct Debit Payment for Council at 1,00% Cashback £2.33 £21,171.07

07/09/2015 4 Direct Debit Payments for Comms at 3,00% Cashback £2.51 £21,168.74

07/09/2015 INTEREST PAID AFTER TAX 10.06 DEDUCTED £40.23 £21,166.23

07/09/2015 MONTHLY ACCOUNT FEE £2.00 £21,126.00
Soon to be £5.00, alas.


Verily, the lord giveth, and the lord taketh away.

Why do you have more than 20k in the account?

Pincher

olip74 wrote: »

£6081 * 2.96% * 20% = £36 that HMRC would have taken.

£20,000 x 2.96% = £592.00
£592.00 x 20% = £118.40

Archi_Bald

michaels wrote: »

I hope Santander discover they have wasted all the money 'spent' on attracting customers as we can all switch away when they try it on with their pricing.

As has been pointed out, for many people Santander will still be the best deal. Barring similar moves from other providers, of course.

Pincher

michaels wrote: »

Why do you have more than 20k in the account?

You mean I should top up every time there is a DD payment?

Life is too short.

r2015

Santander will still be the best deal.

Agree.

I get more interest (tax free) on my deposit in Santander than in an ISA so I'm staying.

Thrugelmir

michaels wrote: »

I hope Santander discover they have wasted all the money 'spent' on attracting customers as we can all switch away when they try it on with their pricing.

I suspect they've achieved their aim of attracting enough good quality customers. Those that switch away probably cost money more to maintain anyway so won't be missed..

YorkshireBoy

Pincher wrote: »

You mean I should top up every time there is a DD payment?

There are easier ways.

All my DDs leave on the 5th of the month. I replenish on the same date by SO from my 2% AER YB Current Account Direct (which is replenished manually on payday).

Cashback and interest is payable on the 11th of the month, along with the £2 fee. A pair of Tesco DDs removes the combined £41.50 (yes I know I won't be able to recover the fee come January!).

Fully automated.

I'm not bothered about a couple of quid either side of £20K, but wouldn't want to 'waste' £1K+.