Life after Santander, where to switch to?

CashMoney

Hi would like some suggestions as to what to do now that Santander have decreased interest on the 123 current account and capped cashback at £5. I have already downgraded the account to a "Lite". I currently have around 4k in there and also have an easy access cash ISA currently maxed out at 60k (3 years worth). I also have 2 childrens saving's account currently at 1500k and 1200k for my 2 kids. I have been looking around as to where to switch current accounts to. These are my findings from the research I have done:
(1) Switch to Metro bank - no interest or perks with current account but 60k in ISA (0.90%) will give me £540 per year and the kids will get approx £23 per year (1.65%).
(2) Switch to HSBC - no interest or perks with current account but 60k in ISA (0.75%) will give me £450 per year and the kids will get approx £10.50 per year (0.75%). Also I will have a linked regular savings account for 12 months at 2.75% which over the year I can put in 3k but only max of £250 per month.
(3) Switch to Nationwide - 5% interest on £2500 for 12 months will give me £125 plus an ISA at 0.50% on 60k will give me £300. Kids will get approx £42 a year at 3%.
(4) Move money from ISA into Marcus account and get £648 on 60k (but not tax free?) and also where should I move to regarding current account if I do move everything in Marcus?

What's best guys or if you have any other suggestions please let me know. I don't want to tie up the majority of my money (the 60k) so that has to have easy access. I have 3 direct debits from current account and currently have around £500 a week coming in if that helps.

Thanks

onlyfoolsandparking

Marcus bank looks your best option and I believe?? up to a £1000 interest is tax free on savings, others might have better suggestions

colsten

If you want to keep some or all of your £60k in an ISA wrapper, find an ISA that pays better interest than the ones you mention above. It's hard to believe you'd actually need instant access to all of that money, so splitting it into e.g. a 1-year ISA and an instant access one might make sense. Also, you have £1,000 interest tax free as a BR tax payer, £500 as a HR tax payer, so an ISA might not even be relevant - but it's impossible to say as we don't know your circumstances and your plans for the money. All I would say is that you should consider the ISA money, and your kids' money, completely separate from your current account. You don't get anything for keeping them all in one place - apart, perhaps, from a rotten deal.

Regarding current account: have you read https://www.moneysavingexpert.com/banking/compare-best-bank-accounts/?

It may well make sense to keep the 123 Lite because of the cashback. Again, you haven't said what your cashback potential is (it's £5 per category, btw, not £5 in total) or how much your bills and other regular payments are, so it's impossible to say whether you should keep it or not. Suffice to say, for myself it does make sense to keep the 123 Lite with up to £5k, and keep the rest of my cash in an instant access savings account. But then, I get around £8 cashback a month.

afis1904

Your savings don't have to be (and probably shouldn't be) in the same bank as your general spending money. If you're a basic rate taxpayer just move the money to Marcus as you have a £1000 savings allowance. 

If you're a higher rate taxpayer, Cynergy bank offer 1.31% easy access. 

Regarding your current account, nationwide could definitely be a good idea for the money you get.

CashMoney

@afis1904 - Yes I'm a basic rate taxpayer. So you think switching to Nationwide and moving the savings to Marcus is best?
@colsten - I don't know when I will need the money that is why I need instant access. I am saving up so I can move to a more affluent area once, without sounding too rude, my mother-in law passes away. She lives with us and wants to stay in current area while she is still alive. She was diagnosed with heart failure around 3-4 years ago. I get hardly any cashback, it's pennies a month or every few months.

afis1904

Yeah, Nationwide and Marcus is gonna give you the best return within the next 12 months. Marcus might drop their rate during that time so it's always good to check every other month or so. 

I presume you are not a first-time buyer because in that case a LISA would also be interesting.

CashMoney

Although I haven't actually purchased a property, I do own one as I inherited from father so I think that doesn't class me as a first-time buyer. Correct me if I'm wrong.
So Marcus and Nationwide? What do others think? I was expecting alot of replies/suggestions lol. 

afis1904

Yeah you aren't a first time buyer but you wouldn't be eligible to use a Lisa for a property as you already own property.

silvermum

Look at Virgin Money Double Take e-Isa for your £60K - currently 1.31%, accepts transfers in and is very easy to manage online.
https://uk.virginmoney.com/savings/products/double_take_e_isa_issue_14/
You can take out money twice in a calendar year without affecting the interest rate.
Virgin also has a Young Saver paying 2.25%, but you can do better than that at e.g. Nationwide.
As others have said, you need to move away from keeping all your different accounts with just one bank/building society to get the very best rates.

CashMoney

@afis1904 - yes thought so.
@silvermum - thanks for pointing this ISA out as I'd never heard of it till now. Would this be better than the Marcus account though?
In terms of moving the 60k I have plenty of options in ISA's but just confused as to who to switch my current account to which has around 5k currently in it? Should I switch to any of the ones I mentioned above? Ideally want to switch to a bank which has good customer service aswell? I hear Metro and Nationwide have good service, not so much HSBC?

Speedbird676

I would move you current account to Nationwide. If you have somebody who can recommend you, you'd each get £100.

Then, depending on whether you want to keep your savings in an ISA wrapper, either:
1. Move it to Marcus if you don't want to keep it within an ISA
2. Move it to Cynergy or Virgin Money if you do want to keep it within an ISA