Santander could be about to tuck into your savings if you owe any money to the Spanish banking giant, or any of its subsidiaries. According to ThisIsMoney, anyone who has savings or current accounts held with Alliance & Leicester, and debts owing to Abbey, will see Santander use that cash to clear the arrears. It will also work in reverse; those saving with Abbey but owing to Alliance & Leicester will see the same fate.

Alliance & Leicester and Santander-owned Abbey bank will formally merge at the end of May, putting Santander in charge of all the accounts held with either bank. Santander can then legally exercise its right to use customers’ cash to clear overdue monies; this is known as ‘set-off’.

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Alliance & Leicester’s Premier Current Account presently offers a £100 cashback incentive, combined with an interest free overdraft for 12 months, free annual European travel insurance and a 0.5% credit interest rate. Fairinvestment.co.uk has announced that Alliance & Leicester will be calling an end to its £100 cashback offer (currently the most generous on the market), with the date firmly set at March 7th of this year.

Helen Bierton, head of current accounts for Alliance & Leicester, offers words of encouragement to potential customers: “Changing your current account is hassle free with our premier switching service so customers do not need to worry about re-directing direct debits or standing orders.”

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The number of people declared insolvent in England and Wales reached a record high in the third quarter of 2009, according to figures from the Insolvency Service.

There were 35,242 personal insolvencies, a increase of 28% on the same period last year, and a 6% rise on the previous quarter.

However, businesses fared better over the period, with 4,716 company liquidations, a 4.7% quarter-on-quarter fall. However, the number of businesses going bust between July and September was still 14.6% higher than the same period a year ago.

The recession has been fuelling the rise in personal insolvencies since 2007. There are a number of reasons for this. Increased unemployment has left more people unable to pay off outstanding debts, and the onset of the credit crunch meant that many banks limited the amount of cheap credit on offer. Therefore many people were unable to borrow their way out of immediate debt problems. The slow property market has also meant that people could not sell their homes and pay off outstanding debt with the equity.

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The Bank of England is expected to expand its radical programme of printing money by a further £50 billion today as it steps up the fight against the deepest economic downturn in decades.

Whilst other countries have begun to emerge from the recession, recent figures revealed a 0.4% slump in the UK economy between July and September, leading experts to predict that Mervyn King, the Bank’s Governor and the rest of the Monetary Policy Committee (MPC) will extend the total size of its quantitative easing plan to £225 billion - the size of the entire Greek economy. This is the sixth quarterly contraction in a row.

“It is a lot of money, but if it does restart the economy and gets it moving again then it’s worth it,” said George Buckley, an economist at Deutsche Bank. “It’s very difficult to say if quantitative easing is working, but it is doing something.”

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Credit unions have reported a rise in the number of people using them to save safely for Christmas.

The Association of British Credit Unions (Abcul) said that it saw a 15% rise in credit union savings in the two years to 2008.

As consumers seek to reduce their personal debt during the recession, there has been an increase in the number of credit unions offering Christmas savings accounts designed to help people manage their money ahead of the most expensive time of year.

According to research from Abcul, 71% of credit unions said they offered a Christmas savings account, with a further 18% planning to offer the account in the future.

Mark Lyonette, chief executive of Abcul, said: “Credit unions, as community-owned and controlled organisations, offer local people a well-trusted financial solution.

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The European Union has approved proposals to split nationalised Northern rock into two businesses, possibly heralding a partial sell-off.

One of the businesses would function as a “good bank”, containing Northern Rock’s sund assets, including most retail deposits and low-risk mortgages. The remaining “bad” bank would hold the remaining mortgages and repay outstanding government loans.

Northern Rock said the EU’s approval was “an important and positive step”.

Whilst the good bank will eventually be sold to a third party, potentially by the time of next year’s general election, the bad bank will have its assets run down until it goes into liquidation. Potential buyers include Virgin, Tesco Bank and National Australia Bank, which owns the Clydesdale and Yorkshire Bank.

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Tesco Bank is to create 1,000 jobs in Newcastle. The supermarket giant’s financial arm announced this morning the creation of a new customer service office in the city to handle customer enquiries and sales for the bank.

“Newcastle is the ideal home for our new insurance customer service centre. The north-east of England has strong experience in customer services and the financial sector, with a well-qualified and enthusiastic workforce,” said Benny Higgins, chief executive of Tesco Bank.

“The city is a great fit for our business and as it develops we will be investing even more in the region over the coming years.”

The firm aims to fill 500 posts by the end of next year, and all 1,000 by 2014. It has taken a 15-year lease on a business park site, and is receiving a grant of almost £2m from the local development agencies.

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National Savings & Investments has announced large increases to the interest rates on some of its policies.

Rates for its guaranteed growth bonds and guaranteed income bonds will rise by as much as 2.95% for new savers, bringing the annual interest rate on some of its fixed rate policies to 4.6% a year before tax.

“Customers can choose to invest between £500 and £1m in our one, two, three or five-year bonds,” said John Prout, a director at NS&I.

The new rates are some of the best available for savers, and are a direct challenge to banks and building societies keen to win customers. NS&I offers the second most competitive two-year bond in the UK with a gross interest rate of 4.25% (just behind AA at 4.35%). Meanwhile a one-year bond with the state-backed institution carries a gross interest rate of 3.95%.

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The Bank of England’s quantitative easing process has helped carry the UK through the recession, deputy governor Charles Bean has claimed.

Speaking to an audience of accountants in London, Mr Bean said he believed the Bank had contributed significantly to the £600 billion of new capital generated by British businesses since January - a £200 billion increase on the previous nine months.

“The rise in asset prices and the recovery in confidence since the start of the Quantitative Easing programme have been significant,” he said.

Bean’s comments come during a period of falling inflation in the UK, suggesting that another round of quantitative easing, beyond the £175 billion already authorised by the government, could safely go ahead.

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Cases of identity fraud have skyrocketed during the economic downturn, with the number of victims of identity theft increasing by a third since the start of the year, according to the fraud prevention service CIFAS.

The past nine months have seen 59,000 recorded cases of impersonation by criminals seeking cash, loans, credit and goods this year. This means the UK has had more instances of identity fraud this year than any other country in Europe.

Account takeover, whereby a criminal hacks into an existing account rather than setting up a new one, have more than tripled in the last two years. More than half of these instances involved credit card accounts. The increase in online shopping and customer carelessness are both thought to be behind the rise. A quarter of takeovers affected bank accounts, while the number of mobile-phone accounts hijacked increased from 899 to 2,022.

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