Is Santander UK safe?

Wobble1 · 11 July 2011 at 1:51PM

Hi people,

Hope you're all good, hoping you may be able to answer a question for me! I have been told that I would not have to worry about Santander UK going down the pan if the whole Euro situation imploded as it is not directly connected to Santander in Spain, and the balance sheets are totally separate etc, so if I take out a bond I don't need to worry about losing my money as far as that is concerned. I'm being pushed to invest a large amount of my savings in a bond over the course of a five to six year period, but I'm told the higher risk ones aren't covered by the FSA which I am a bit concerned about. Am I over reacting? Do I need to get out more? Any advice gratefully received.

rockitup · 11 July 2011 at 1:59PM

Wobble1 wrote: »

Hi people,

Hope you're all good, hoping you may be able to answer a question for me! I have been told that I would not have to worry about Santander UK going down the pan if the whole Euro situation imploded as it is not directly connected to Santander in Spain, and the balance sheets are totally separate etc, so if I take out a bond I don't need to worry about losing my money as far as that is concerned. I'm being pushed to invest a large amount of my savings in a bond over the course of a five to six year period, but I'm told the higher risk ones aren't covered by the FSA which I am a bit concerned about. Am I over reacting? Do I need to get out more? Any advice gratefully received.

Stick to the £85,000 limit for cash and steer well clear of their 5 to 6 year bonds, these are basically structured products just with a different name.

See these links below to previous posts about how to construct your own

http://forums.moneysavingexpert.com/showthread.php?p=2729367#post2729367

http://forums.moneysavingexpert.com/showthread.php?p=17280839#post17280839

For an easy explanation see JamesD post number 4 in second link, very good way and you get the dividends too, whereas Santander don't pay them on their products

Wobble1 · 11 July 2011 at 3:17PM

Thanks Rockitup,

The links are interesting. I will do some research, "over the counter" bonds don't seem too hot to be sure, especially the long term (5 years) ones. I get aggro every time I go in to the place about where they think I should be putting this, and why have I got that in that account etc...what about Santander UK? Think it's safe enough? Many thanks.

rockitup · 11 July 2011 at 4:27PM

I have heard this both from Santander UK and Citibank in SE Asia that their divisions finances are ring fenced from the rest of their organisation.

But whatever happens you would be covered for up to £85,000 cash for single and £170,000 joint accounts.

Santander's equity bonds are backed by an insurance company (also part of Santander) so if Santander were to fold, the guarantees of their 5/6 year equity bonds would probably not hold up to much just like those backed by Lehman Brothers (paid out 9p in the £) and the like.

One thing I hated about Santander was that I had so much hassle making debit card payments to my Share dealing account, they kept blocking my card and told me to pop in top the nearest branch with my passport and other ID even though I told them I was 7,700 miles away from that one.

Higher interest rates on cash deposits are not always worth chasing if customer service is going to let you down.

englisho · 11 July 2011 at 4:57PM

I bank with santander and to be honest never had a problem with using the debit card. I recently got two ns&i index certs for me and the missus at maximum amount and the transactions sailed through no problem.

rockitup · 11 July 2011 at 11:59PM

englisho wrote: »

I bank with santander and to be honest never had a problem with using the debit card. I recently got two ns&i index certs for me and the missus at maximum amount and the transactions sailed through no problem.

Agreed, mine went through fine to start with then when they first refused the online debit card payments, they told me I had an unusual pattern of large payments to and from my account.

I took time to explain that I invest in shares and funds for days or weeks at a time and that was why the money would return to the current account and then transfer to esaver account to earn a bit of interest whilst not invested.

They asked me to speak to their in branch tied financial adviser and I simply asked if their adviser wanted some share tips from me too. That is when my troubles really started regarding payments being blocked, Santander do not like money leaving their clutches and going to other financial institutions. A bit like Wachovia Bank in the USA and look where that got them.

Keep on making large payments and you will experience the same thing too, other posters on here during the last year have encountered the same problem. Just a couple of payments like you made and no problem though.

staggered · 12 July 2011 at 10:00AM

Wobble1 wrote: »

Hi people,

I'm being pushed to invest a large amount of my savings in a bond over the course of a five to six year period,

Don't let anyone push you into a product you don't want.

Re the initial question, I've similarly read that Santander UK money is ring-fenced from the "main" arm of Santander but I'm sceptical about this. If they had to, I suspect they would find a way of "un-ring-fencing" it.

ETA: If it's a large sum of money you've got to invest (over £85k), I'd split it. Even if you lose a bit on your return. It's just not worth the risk - who knows what will happen in the next 5 or 6 years?

Wobble1 · 12 July 2011 at 12:14PM

Hi all,

Many thanks for the valuable replies. Yes, the more I look at the bumpfh the more wary I am becoming. It sounds good and looks pretty on paper, but it's just a load of colourful columns at the end of the day, doesn't actually mean squat. If you throw a handful of dirt in the air the wind could take it either way if you know what I mean. I think maybe a shares ISA where I can choose what I put in it, a SHORT term bond and an easy access doo dah for the rest may be the way forward. I need to look at the easiest way to do the shares ISA. Santa are grabby and they don't like letting go, very much more so since Abbey days. Still, unlike your rellys, at least you can choose where you bank......:rotfl:

Masomnia · 12 July 2011 at 12:24PM

Wobble1 wrote: »

Hi all,

Many thanks for the valuable replies. Yes, the more I look at the bumpfh the more wary I am becoming. It sounds good and looks pretty on paper, but it's just a load of colourful columns at the end of the day, doesn't actually mean squat. If you throw a handful of dirt in the air the wind could take it either way if you know what I mean. I think maybe a shares ISA where I can choose what I put in it, a SHORT term bond and an easy access doo dah for the rest may be the way forward. I need to look at the easiest way to do the shares ISA. Santa are grabby and they don't like letting go, very much more so since Abbey days. Still, unlike your rellys, at least you can choose where you bank......:rotfl:

You wouldn't spend tens of thousands on a car without fully understanding what it is and how it works, or on a holiday where you didn't know what you were going to be doing. The principle is the same here, in my opinion.

Unless you're 100% sure then don't do it!

sabretoothtigger · 12 July 2011 at 3:19PM

Safer then most uk banks hence they bought up a few as they fell. Operates on a budget scheme opposite to RBS I believe which must be a good thing.
Spain isnt the majority of their business, they operate south america and many places worry about them if you like

I'm being pushed to invest a large amount of my savings in a bond over the course of a five to six year period, but I'm told the higher risk ones aren't covered by the FSA which I am a bit concerned about.

Dont be pushed to do anything. I prefer the companys shares themselves which yield well over 5%

Is Santander UK safe?

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