With the big story this week being Santander's takeover of Alliance and Leicester, it's only natural that many of you will have some questions about what happens next.
So, here are some answers to some key questions:
- I'm an A&L customer; will I get a windfall from the takeover?
This looks unlikely; the only windfalls will go to shareholders of the bank.
The reason customers in building society takeovers get a payout is that as members they effectively own the society. A&L was a building society but was demutualised back in 1997.
You will see your mortgage or account transferred to the new owner and eventually it will become an Abbey account.
- What will happen to my current account and savings?
It's highly unlikely that everything that needs to be merged will be ready by October when the deal is due to be signed. Although no new accounts will be launched under the A&L brand, existing accounts are likely to run in tandem for a while.
A&L has had the best current account on the market for a while now, both in interest rate (paying up to 8.19% to its Premier Direct customers) and winning the Moneyfacts current account of the year for 5 years in succession.
Abbey recently launched a competitive deal, but at 7.72% the rate is slightly lower and there are more restrictions.
Kevin Mountford of price comparison website Moneysupermarket.com says he is concerned that the loss of A&L would make the rest of the savings and current account markets less competitive.
- What will happen to my mortgage?
Given the current state of the property market, a very important question. If you are an existing A&L mortgage customer, you will continue making payments as before and are unlikely to notice any difference until you come to the end of any special offer period.
Ray Boulger of mortgage broker John Charcol is concerned that having introduced a new computer system to Abbey, Santander will ditch the one that runs A&L's mortgages, and with it the flexible tracker mortgages currently on offer. He said:
"One of the key differences between Abbey and A&L is that A&L has a fully flexible mortgage; you can pay off your mortgage so there is only £1 left without any penalties and borrow the money back when you want. It would be a great shame if the UK market lost this flexibility."
Rate-wise, Abbey has been offering better deals than A&L, which has only only recently reappeared in the best-buy tables after many months away. This is because Abbey benefits from Santander's greater financial strength, which allows it to borrow more cheaply than smaller mortgage lenders like A&L.
When it is time to remortgage, as a former A&L customer, you may get lower interest rates than you would have had access to had the bank remained independent.
- What about customer service?
Hmm…an interesting one; it could improve or get worse!
In recent months, Abbey has attracted a huge number of complaints (especially over ISA transfers) which are apparently due to the introduction of a new computer system by Santander. Whether A&L customers experience similar issues will depend on how the bank decides to integrate the two lenders.
There are other issues that could arise from suddenly finding your account is owned and administered by an overseas-based bank; some Abbey customers have had difficulties reporting credit card fraud to Santander's Spanish call centre.
Given that Santander is unlikely to keep open two branches of the same bank sitting right next to each other on the high street, it seems pretty likely there will be branch closures (and staff layoffs).
And for all of us, this could mean even fewer cash machines that still offer free access to our money!