Totally Confused, but need to do something

nightowl2

Hi Everyone,

I am not really into tracking interest rates etc, I just put money away each month.  Just switching my bank account from HSBC to Chase, I also have a Santander account that I opened some years ago when they were offering a really good rate...... that has clearly gone now.

My main problem is this £85k limit of protection on a bank account (FSCS), and I am over that on the Santander account.

so couple of questions:

1.  Would it be wise to open another account and transfer some of the funds there in order to get full protection on all my money?  or am I reading too much into the £85k limit.  Can't remember the last time in the UK we had a bank in trouble where that £85k limit meant that some people lost money.

2.  Should I just transfer money into a locked savings account, i.e., Market Harborough BS.   Its very rare for me to dip into my Santander account, except for bill payment and I am transferring bill payment from Santander to Chase as they give you 1% back for the first 12 months.


Many thanks and I look forward to reading any responses.

Albermarle

nightowl2 said:

Hi Everyone,

I am not really into tracking interest rates etc, I just put money away each month.  Just switching my bank account from HSBC to Chase, I also have a Santander account that I opened some years ago when they were offering a really good rate...... that has clearly gone now.

My main problem is this £85k limit of protection on a bank account (FSCS), and I am over that on the Santander account.

so couple of questions:

1.  Would it be wise to open another account and transfer some of the funds there in order to get full protection on all my money?  or am I reading too much into the £85k limit.  Can't remember the last time in the UK we had a bank in trouble where that £85k limit meant that some people lost money. The chance of you losing money is pretty slim, but why take the chance when it is pretty easy to open new accounts on line. It sounds like you need to be a bit more pro-active in chasing better savings rates anyway, especially with rampant inflation

2.  Should I just transfer money into a locked savings account, i.e., Market Harborough BS.   Its very rare for me to dip into my Santander account, except for bill payment and I am transferring bill payment from Santander to Chase as they give you 1% back for the first 12 months. I presume you mean a fixed term savings account? If you are unlikely to need the money for some time then you get better rates doing this.
Compare The Best UK Savings Accounts | moneyfacts.co.uk


Many thanks and I look forward to reading any responses.

See comments in bold above. Two other points.
1) With the better rates you may find you are liable for some tax. You maybe better putting some of the savings in a cash ISA to protect them from tax. What is the personal savings allowance? (moneysavingexpert.com)

2) If you really do not need some of this cash for many years, you should at least consider investing some of it. Possibly adding to a pension or a Stocks and Shares ISA

tacpot12

I tend to agree that the actual risk of a large UK Bank going under is very, very low, but the new rules that the Conservative government are pushing through means that that risk is likely to increasing. I think I would also move some money from Santander to another provider just in case of any IT system problems that mean withdrawals are delayed just at the point you really need to make a withdrawal. 

Locking money up for a period is no bad thing. Most accounts allow you make a withdrawal if you really need to, but at the penalty of losing some interest. 

Linton

1)  No-one has ever lost money in a UK bank failure due to having more than £85K in their account.  But the £85K limit only came into force in 2017. 

2) Would you really want easy access to more than £85K?  

I would have thought a far greater cause of concern than a bnk going bust should be the continual loss of value of your savings because of inflation.

Albermarle

Locking money up for a period is no bad thing. Most accounts allow you make a withdrawal if you really need to, but at the penalty of losing some interest. 

Only Fixed term ISA's allow early withdrawals ( with an interest penalty). To withdraw from a 'normal' fixed term savings account, you pretty much have to be terminally ill.  

Band7

nightowl2 said:

 

I am not really into tracking interest rates etc, I just put money away each month.  Just switching my bank account from HSBC to Chase, I also have a Santander account that I opened some years ago when they were offering a really good rate...... that has clearly gone now.

If you opened your Santander savings account before they dropped the rate, you will still have the 2.75% AER account until the end of 12 months from account opening. Chase is trailing this, and other accounts, and I believe they are still only paying interest on up to £25k.

It's easy to spread your savings across several banks that are not linked.https://moneyfacts.co.uk/savings-accounts/

Richard1212

nightowl2 said:

Hi Everyone,

I am not really into tracking interest rates etc, I just put money away each month.  Just switching my bank account from HSBC to Chase, I also have a Santander account that I opened some years ago when they were offering a really good rate...... that has clearly gone now.

My main problem is this £85k limit of protection on a bank account (FSCS), and I am over that on the Santander account.

so couple of questions:

1.  Would it be wise to open another account and transfer some of the funds there in order to get full protection on all my money?  or am I reading too much into the £85k limit.  Can't remember the last time in the UK we had a bank in trouble where that £85k limit meant that some people lost money.

2.  Should I just transfer money into a locked savings account, i.e., Market Harborough BS.   Its very rare for me to dip into my Santander account, except for bill payment and I am transferring bill payment from Santander to Chase as they give you 1% back for the first 12 months.


Many thanks and I look forward to reading any responses.

Hi nightowl.  Locked savings accounts are fine if you know you have enough in easy access accounts for your urgent needs----and as another forumite said, you can often get money out for a penalty sum. Personally I try to keep as much as I might need in Easy Access and the rest in "locked" ( which are usually "unlockable"). If you're worried about the £85k limit, I use Joint Accounts with my wife----then the figure becomes £170k ( you may wish to consider  if that option is relevant in your own case ). Good luck with all your savings.

Albermarle

Richard1212 said:

nightowl2 said:

Hi Everyone,

I am not really into tracking interest rates etc, I just put money away each month.  Just switching my bank account from HSBC to Chase, I also have a Santander account that I opened some years ago when they were offering a really good rate...... that has clearly gone now.

My main problem is this £85k limit of protection on a bank account (FSCS), and I am over that on the Santander account.

so couple of questions:

1.  Would it be wise to open another account and transfer some of the funds there in order to get full protection on all my money?  or am I reading too much into the £85k limit.  Can't remember the last time in the UK we had a bank in trouble where that £85k limit meant that some people lost money.

2.  Should I just transfer money into a locked savings account, i.e., Market Harborough BS.   Its very rare for me to dip into my Santander account, except for bill payment and I am transferring bill payment from Santander to Chase as they give you 1% back for the first 12 months.


Many thanks and I look forward to reading any responses.

Hi nightowl.  Locked savings accounts are fine if you know you have enough in easy access accounts for your urgent needs----and as another forumite said, you can often get money out for a penalty sum. Personally I try to keep as much as I might need in Easy Access and the rest in "locked" ( which are usually "unlockable"). If you're worried about the £85k limit, I use Joint Accounts with my wife----then the figure becomes £170k ( you may wish to consider  if that option is relevant in your own case ). Good luck with all your savings.

Which was an incorrect statement, as I pointed in an earlier post. It is only possible with a fixed rate ISA, not with non ISA fixed rates.

wmb194

Albermarle said:

Richard1212 said:

nightowl2 said:

Hi Everyone,

I am not really into tracking interest rates etc, I just put money away each month.  Just switching my bank account from HSBC to Chase, I also have a Santander account that I opened some years ago when they were offering a really good rate...... that has clearly gone now.

My main problem is this £85k limit of protection on a bank account (FSCS), and I am over that on the Santander account.

so couple of questions:

1.  Would it be wise to open another account and transfer some of the funds there in order to get full protection on all my money?  or am I reading too much into the £85k limit.  Can't remember the last time in the UK we had a bank in trouble where that £85k limit meant that some people lost money.

2.  Should I just transfer money into a locked savings account, i.e., Market Harborough BS.   Its very rare for me to dip into my Santander account, except for bill payment and I am transferring bill payment from Santander to Chase as they give you 1% back for the first 12 months.


Many thanks and I look forward to reading any responses.

Hi nightowl.  Locked savings accounts are fine if you know you have enough in easy access accounts for your urgent needs----and as another forumite said, you can often get money out for a penalty sum. Personally I try to keep as much as I might need in Easy Access and the rest in "locked" ( which are usually "unlockable"). If you're worried about the £85k limit, I use Joint Accounts with my wife----then the figure becomes £170k ( you may wish to consider  if that option is relevant in your own case ). Good luck with all your savings.

Which was an incorrect statement, as I pointed in an earlier post. It is only possible with a fixed rate ISA, not with non ISA fixed rates.

They seem to be rare these days but not strictly true e.g., Nationwide's branch based non-Isa savings bonds can be closed with an interest penalty.

https://www.nationwide.co.uk/savings/fixed-rate-bond/

Band7

wmb194 said:

Albermarle said:

Richard1212 said:

nightowl2 said:

Hi Everyone,

I am not really into tracking interest rates etc, I just put money away each month.  Just switching my bank account from HSBC to Chase, I also have a Santander account that I opened some years ago when they were offering a really good rate...... that has clearly gone now.

My main problem is this £85k limit of protection on a bank account (FSCS), and I am over that on the Santander account.

so couple of questions:

1.  Would it be wise to open another account and transfer some of the funds there in order to get full protection on all my money?  or am I reading too much into the £85k limit.  Can't remember the last time in the UK we had a bank in trouble where that £85k limit meant that some people lost money.

2.  Should I just transfer money into a locked savings account, i.e., Market Harborough BS.   Its very rare for me to dip into my Santander account, except for bill payment and I am transferring bill payment from Santander to Chase as they give you 1% back for the first 12 months.


Many thanks and I look forward to reading any responses.

Hi nightowl.  Locked savings accounts are fine if you know you have enough in easy access accounts for your urgent needs----and as another forumite said, you can often get money out for a penalty sum. Personally I try to keep as much as I might need in Easy Access and the rest in "locked" ( which are usually "unlockable"). If you're worried about the £85k limit, I use Joint Accounts with my wife----then the figure becomes £170k ( you may wish to consider  if that option is relevant in your own case ). Good luck with all your savings.

Which was an incorrect statement, as I pointed in an earlier post. It is only possible with a fixed rate ISA, not with non ISA fixed rates.

They seem to be rare these days but not strictly true e.g., Nationwide's branch based non-Isa savings bonds can be closed with an interest penalty.

https://www.nationwide.co.uk/savings/fixed-rate-bond/

That particular Nationwide account appears to be the only exception to the rule.

Bigwheels1111

I’ve got 2, 5 year fixed rates with annual payout and will get a third in the new year when my next pot matures.
Plus a 3 year fixed isa.
This will give me a nice income for 5 year, Plus a good lump sum in easy access for emergencies.