In a recent move, Santander have tripled the amount of cash back available to customers taking out their ‘Preferred Current Account‘, making the gap between it and it’s competitors even greater.

With very few accounts offering a money back scheme, this sets Santander apart from the rest of the market and gives potential customers a very big incentive to reel them in.

However, this fantastic offer is not available to everybody as there are certain limitations to applying for this cash back amount. With Santander’s preferred current account there are 3 levels of cash back that are available.

For all new customers, instead of the top £300 cash back offer you will only be given a £100 reward. This level is available to anyone who switches to Santander’s current account and can pay in £1000 a month.

Their second level comes with a slight restriction on those who can apply. To gain the medium level, £200 cash back, you must first possess a Santander Mortgage dating back to August 2011. This is great news if you are looking to switch your current account to the same bank that you have your mortgage, but bad news if you don’t as you are excluded from the top two tiers of this cash back scheme.

And then we come to the grand prize, the £300 cash back level. For this you will need everything that was required for level 2, as well as a Savings Account with Santander containing £10,000. However, unlike with the mortgage requirement, you do not need to have a pre-existing savings account. This must be deposited, and still held, exactly 13 weeks after you open your current account.

With all of these rules that you must adhere to in order to gain your £300 cash back, it may prove easier to simply go with the lower level of account.

But if you have fulfilled the criteria to get this top level of cash back, it could be very rewarding to switch to Santander.

This is the opinion of the director for independent advisory firm Ark Financial Planning, Phil Perry – who has insisted that it is possible for people without large funds available to them, to plan ahead when it comes to their financial future.

Mr Perry went on to explain that the most suitable products for individuals who have “absolutely no savings whatsoever” are “deposit-based” accounts, as these tend to provide a more flexible way to bank, in terms of allowing the account holder easy access to their money.

“The first port of call would always be an ISA, depending upon the client’s tax position of course. There are many facilities out there these days [where you can] find the best scheme,” noted Mr Perry.

In addition to this, the financial expert then went on to state that instant access packages are usually the most worthwhile deal for a consumer to take out, as it avoids having to tie up finances for long periods of time.

He went on to explain that it is not currently a good idea to store money in deposit-based funding for more than a year at a time, as there is a widespread expectation that the Bank of England will opt to boost interest rates at some point in the next 12 months.

The Bank’s Monetary Policy Committee has voted to maintain the base rate at 0.5 per cent for 29 months in succession, but many financial analysts feel this trend of keeping the figure at this historically low level will come to an end sooner rather than later.

Mr Perry finished by stating that “if that is the case and you have fixed yourself for something longer, realistically you may fall behind the times”

Most banks now operate using the faster payments system enabling money to be sent instantly by the click of a mouse.

This means the money credits the beneficiary’s account instantly and is available to withdraw soon afterwards.

But for this process to complete as planned you must have first ensured that all of the details were entered correctly.

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A listener of the BBC Radio 4 Money Box programme, who banks with Halifax, spoke of how he set up a payment to his wife’s savings account. Although the account name and sort code were correct he made a slight mistake when entering the account number, with one incorrect digit.

However, the number he entered was in fact a valid account number for someone else’s account, so the £1500 was sent to that bank account.

He said: “The bank seemed to think that I’d double clicked on a “3″ so that the last three numbers were 496, but because I’d clicked on the 3, the 394 came up, I didn’t pick up on it, and it went through someone else’s account.”

It was not until a few weeks later upon checking his wife’s account that the mistake was noticed.

The unknown recipient withdrew the money within 24 hours of the accidental transfer.

According to the listener, Halifax said it had sent a letter to the customer on his behalf asking for the money to be returned, but it is powerless to do anything else.

A spokesperson from the Information Commissioner’s office said that Halifax us under no circumstances to reveal the name of the customer.

However, it added that if the person that withdrew the cash did so knowing that it did not belong to them then this is seen as a crime, which means the police could get involved and obtain the details.

Most  people are unaware that when making a cash transfer, most UK banks do not check customers account number against the name provided to make sure they match.

Sandra Quinn, of the UK Payments Administration said: “The way all payments are allocated these days is by the sort code and account number, so your six digit sort code and your eight digit account number.

“Because systems are automated and they’re transmitting more than 10million payments a day in some cases, the only real way that payments can be allocated to accounts is by those digits rather than by the name.”

In a statement Halifax said:

“We understand the frustration that the customer is experiencing.

“We are taking all reasonable steps to recover these funds on the customers behalf, and will keep him updated in relation to this matter.”

In addition, higher rate on dividends will move from 32.5% to 42.5% of the grossed up income (equivalent to 36.11% of the net dividend) for taxable income above £150,000.

As a result of the changes to become effective from 6 April, private banks and wealth managers have been advising those who will be affected to act now in order to protect their income. Many are taking steps to bring forward earnings to this tax year, or plan their finances in an attempt to lower the impact.

Below are some tips outlined by Which4U that higher earners should consider:

1. Make full use of all your tax allowances Many of us complain about how much tax we pay, but forget to take advantage of tax free breaks. The truth is, many of us could be missing a trick when it comes to tax relief.Always ensure you have used up your allowances by the end of every tax year. A popular tax free savings incentive is your first port of call, in the form of individual savings accounts (Isas), with an annual allowance of £10,200 (or £7,200 for those under 50 until April 6th), as well as tax-free National Savings & Investments products.No income tax is required to be paid for any interest or capital gains earned using Isas, so make sure you shop around to find the best Isa rates, or alternatively if you wish to invest in a stocks and shares Isa, do some research into the market.Transfer investments that provide an income to your spouse, if he or she does not work or has earnings that fall in a lower tax band. This now not only applies to spouses on the basic rate tax but also those paying 40%, if the other spouse currently earns above £150,000 per year.
2. Close your bank account According to advisers at Deloitte, those that have a savings account paying interest on an annual basis that is due to be paid after April, should consider closing the account before the new tax rules kick-in in, allowing the interest payment to be subject to a lower rate of income tax. After, you can simply open a new bank account.
3. Donate to charity in the new tax year After 6 April, high earners making donations using the Gift Aid scheme will qualify for higher tax relief, which means that more money will be given to the charity. However, you should think about the potential impact delaying your regular donations could have on the charity, especially in the current financial climate.
4. Accelerate your income Some employers have chosen to pay employees their salaries early to avoid the higher tax. Consider asking your employer if this is a possibility. This may be easier for those in entrepreneurial or family businesses.You can also make use of any share options you currently hold, as these attract income tax so you will pay the lower rate. Those already getting pension income are able to opt to receive annual payouts as a lump sum before the changeover date in April.
5. Add more to your pension fund in the new tax yearIt has become apparent that pensions are looking more of an unattractive option to higher earners, with tax relief cut to 20% on some contributions.However, if you do fall into this category, you may want to act fast. In the 2010/2011 tax year, those earning more than £150,000 will be eligible to put in at least £20,000 and up to £30,000 with 50% tax relief, before the new restrictions come into play in 2011.Advisers at Deloitte have suggested that people earning between £100,000 and £113,000 – who will effectively be paying 60% tax from April as a result of their personal allowance also being eroded – should also add to their pensions.
6. Consider venture capital trusts (VCTs) Although these start-up investment schemes can be quite risky, they are being labelled as an alternative to a pension fund for higher earners because contributions attract 30% tax on the way in.
7. Move your assets into an offshore bondOffshore bonds are investment bonds that are operated by life insurance companies and also have some life insurance attached to them. This enables you to avoid paying any tax until you encash the bond. The idea is that by the time you come to encash the bond, you may be subject to a lower rate of income tax, for example when you’re retired – or if you have become an expat or a non-dom, you may not have to pay any UK tax whatsoever. Many well known financial advisers are using this approach for clients.
8. Change from income investments to Capital Gains Tax In 2008, capital gains tax was lowered to 18%, and investors have since been looking to acquire returns that are taxed as capital gains rather than income. According to advisers, the 50% income tax band has sped-up this switch. Over the past year, demand for products such as zero dividend preference shares has significantly risen, as well as funds that work on a total return basis instead of generating income, such as absolute return funds.
9. Consider leaving the countryThis may seem like a rather extreme measure – but advisers at Cazenove and Schroders Private Bank have said that many of their clients are considering this option in response to the substantial tax demands.

   By Sam Gooch