Martin Lewis, 48, frequently analyses the best deals in his quest to help Britons save money. The Money Saving Expert also regularly turns his attention to how Britons can make their money grow. While he has acknowledged interest rates are at record lows currently, partially due to the COVID-19 crisis, he has also provided tips on how savers can boost the money they put aside.
Martin has now weighed in on an issue which is likely to be pressing for a certain group of Santander customers.
He explained that in January, the Santander 123 current account dropped its interest from 1.5 percent to one percent.
At the time, Martin described the account as a dead duck, but due to the developments of the lockdown crisis in the months afterwards, it fared favourably.
However, Santander has recently announced it will cut the interest rate again to 0.6 percent, a rate Martin described as “paltry” given the £5 per month fee.
“Phone, TV and broadband cashback is being cut from three percent to one percent, and water cashback up from one percent to three percent.
“Of course, less cashback and a bigger fee is a pain in the bum. Yet there’s little better out there. So for most, if you’ll still earn more cashback than the fee costs, you may as well stick.”
Martin has said the changes to cashback on both the main and Lite accounts are a cashback cut “in reality”.
This is because, he states, on average people pay three times the bills on phone, TV and broadband than they do on water.
As a result, customers affected may wish to speak with the bank to discuss the options available to them at this time.
Susan Allen, Head of Retail Banking at Santander, announced the changes to the bank’s current account, but attempted to reassure customers.
She said: “It has been a very difficult decision to make these changes to our popular 123 accounts.
“But both the 123 and 123 Lite Current Accounts will continue to be good options for the large majority of our customers with the value they still offer.
“123 is the only account on the market offering both in-credit interest and cash back, while both 123 and 123 Lite accounts give cashback on essential household bills paid by direct debit.”
The bank has said it will be writing to all customers during July and August to explain the changes taking place.
It also states it will outline alternative account options for customers who could be detrimentally affected.
Customers can check how much cashback and interest they earn at present by using online or mobile banking, or looking at their monthly account statement.
Martin Lewis is the Founder and Chair of MoneySavingExpert.com. To join the 13 million people who get his free Money Tips weekly email, go to www.moneysavingexpert.com/latesttip