Santander 123 rate to be cut to 1.5%

brewerdave

Looks like the Stock market is going to get a boost in November! Doesn't seem to be anywhere else to put the cash even now; God only knows what it will be like for cash savings by then:(

bxboards

Worse then expected! I imagine a few other banks will also drop rates.

I got a lot of dis-agreement on a current account vs ISA thread here lately, as it seemed clear to me that high paying current accounts were not long for this world.

I maxed out a Nationwide 2% ISA fix end of July filling my annual allowance from 1 of my 123 accounts assuming it would be a 2% cut, but 1.5% is even worse and after the fess is effectively around 1.2 or 1.3%. I am fortunate not to have large direct debit outgoings so I was interested in the 123 purely for the interest.

For anyone who is maxing out 123's is going to be hard to find a new home, I prefer not to invest in the stock market as this seems to be an artificially inflated bubble ready to pop too..

Ouch!

badger09

!!!!!!:(

Now I definitely feel a spending spree coming on, which I guess, is one of the aims of the recent base rate cut.

However, it is unlikely I will spend much on anything which will benefit the UK economy as most will be spent on even more foreign travel.

Nick_C

badger09 wrote: »

!!!!!!:(

Now I definitely feel a spending spree coming on, which I guess, is one of the aims of the recent base rate cut.

However, it is unlikely I will spend much on anything which will benefit the UK economy as most will be spent on even more foreign travel.

Well my guess is that your response will be atypical.

The one thing I am likely to change is the amount I spend on overseas travel. I had planned a big holiday to the US next year, but the fall in value of the £ means an increase of about 15%. I may well cancel and buy a new kitchen instead. I will also try to avoid buying goods produced in other EU countries and buy British instead on ethical grounds.

Any move to encourage consumers to spend their money in the UK instead of abroad is going to be beneficial to the UK economy.

Encouraging consumers to spend instead of save will boost the economy.

People investing instead of saving will boost the economy.

The cut in mortgage interest rates will put more money into peoples pockets.

But even without the impact of Brexit, the 123 account was always a loss leader that could not be sustained in the long term. It remains a good account, and I will continue to use it as my main current account.

sharpharp

I bet half the people complaining voted for Brexit....

Nick_C

bxboards wrote: »

I prefer not to invest in the stock market as this seems to be an artificially inflated bubble ready to pop too.

Your choice of course, but I'm very happy with the 5.33% tax free income from my portfolio. I don't worry too much about the current value as it's money invested in the long term to give me an income. It goes up and down. It's worth more than I paid for it at the moment and it's gained 8% since June 23, but that's just a paper profit.

Nick_C

sharpharp wrote: »

I bet half the people complaining voted for Brexit....

Statistically, that sounds about right.

And I bet 90% of the people who are complaining don't understand economics or the free market.

badger09

Nick_C wrote: »

Well my guess is that your response will be atypical.

The one thing I am likely to change is the amount I spend on overseas travel. I had planned a big holiday to the US next year, but the fall in value of the £ means an increase of about 15%. I may well cancel and buy a new kitchen instead. I will also try to avoid buying goods produced in other EU countries and buy British instead on ethical grounds.

Any move to encourage consumers to spend their money in the UK instead of abroad is going to be beneficial to the UK economy.

Encouraging consumers to spend instead of save will boost the economy.

People investing instead of saving will boost the economy.

The cut in mortgage interest rates will put more money into peoples pockets.

But even without the impact of Brexit, the 123 account was always a loss leader that could not be sustained in the long term. It remains a good account, and I will continue to use it as my main current account.

I don't actually disagree with what you have said.

Mid/late 60s, I don't need/want a new kitchen being content with the 15 year old one I already have:o In fact, I don't really need/want anything material, but OH's recent health problems and other reminders of mortality have made me realise that dreams of exotic travel should be turned into reality before its too late. My son is based in Hong Kong - another major reason for travel, almost regardless of the cost.

I am already invested in the stockmarket but for me, 'long term' is more likely to 10, rather than 20, 30 or 40 years:cool:

Incidentally, I voted Remain, because I felt that was in the best interests of UK, and I don't mean just the UK economy.

I am not in fact complaining about Santander's rate cut - a cut was inevitable and I'm sure many others will follow. Like you, I will continue to use it as my (2nd) 'main' account.

My response may be 'atypical', but I suspect it is by no means unique.

bigadaj

Nick_C wrote: »

Statistically, that sounds about right.

And I bet 90% of the people who are complaining don't understand economics or the free market.

Though the majority of economists, boe interest rate committee, recent labour, conservative and coalition politicians etc etc seem to have no idea of free market economics either.

Free market economics doesn't mean that you cut interest rates, bail out failed banks, print excessive amounts of money and fail to write off debts from years ago that should have been.

China is closer to a free market economy than Western Europe or North America as things stand.

Kendall80

Its the size of the changes that surprises me. Increasing the monthly fee from £2 to £5 then not too long afterwards cutting their interest rate in half - Almost makes you think that they dont want any customers. I'm sure for some amounts calcs may still show this account to be competitive but personally i'm starting to look elsewhere for my main account.