THE City cannot yet agree whether Banco Santander Central Hispano is Abbey’s knight in shining armour, or a Don Quixote who will stir up further confusion at a bank already engaged in “turning banking upside down”. But a few things are already certain. Observers will not be able to resist making more “jamón tomorrow” jokes about the jamón serrano (ham) which will be one of the perks on offer to Abbey investors if they give their assent to the Santander bid.

These witticisms will sound particularly weak to the 865,000 holders of with-profits investments with Abbey National Life, Scottish Mutual and Scottish Provident, the bank’s life insurance division. For these customers, there is no likelihood of jam, or even ham, at any time soon. All three funds are closed and so are in a state close to benign neglect. Hoping for the restoration of bonuses would be tilting at windmills.

Santander says that it will inject £500 million into Abbey’s life insurance business. However, this will not suddenly liberate the incarcerated customers who cannot cash in their holdings without paying an exit fee or MVR (market value reduction), a piece of jargon that continues to be used despite Abbey’s plain words-only pledge, an essential part of the “turning banking upside down”. This underlines the impression that in this process of overhaul, the unfortunate with-profits holders are forgotten people.

IF SANTANDER wins Abbey, this could spark further European cross-border banking mergers. But the average Abbey account-holder is probably less interested in the future structure of the banking industry, than in the service he would receive under Spanish ownership.

For example, would it mean the abolition of sneaky overseas fees when using a cash machine in Spain? This is the kind of bank charge that we increasingly resent. When you use an overseas ATM, you pay 1.5 per cent of the amount withdrawn — foreign exchange loading fees are added on top, but these are not shown separately on your statement, so that you will not complain. Santander pledges to make Abbey “extremely competitive” but customers want to how it will be achieved.

THE bad news that we owe a trillion and the likelihood of another base rate increase should be the stimulus to sort out debt — not perhaps what you wish to hear in the holiday season, but personal finance sections must sometimes act the spoilsport.

You can limit your efforts to moving to one of the new cheaper fixed-rate mortgages, now becoming available amid expectations that rates will not need to rise as steeply as had previously been forecast. Or you can follow our ten-point plan on page 3. Think of it as an extreme makeover for your finances.

Tranferring existing credit card balances to a 0 per cent card makes sense, as you cut the cost of repaying your borrowings. But anyone attracted by Barclaycard’s offer of 0 per cent until August 2005 should note the experience of a Times Money reader.

Surprised to find that Barclaycard had given her a “derisory” credit limit of £800 — of little use to a person wishing to transfer large debts — she questioned the decision. Barclaycard conceded that she was a good credit risk, but would not budge. Our reader suspects that, when she starts to pay the card’s high standard rate of 17.9 per cent next summer, her credit limit will immediately be raised. She will now be giving her custom to a card company with a more genuine 0 per cent deal.

THE House of Commons Treasury Select Committee’s report into the long term savings industry is appropriately unflattering about the products on offer and the handsome remuneration paid to the bosses of companies that have failed their investors. The committee rightly concludes that the industry which “limps from crisis to crisis” is “too important to be left on its own to sort out its problems”.

There are some useful suggestions, including the introduction of a summary box, detailing the charges and the risk level of any investment. And it is hard not to agree that everyone, including government and consumers, should join in the process of reform. However, the Labour-dominated committee fails to point out how the current Government’s policies on pensions and Isas have played a role in undermining public confidence. Until the Government rethinks these policies, this industry has an excuse to serve us poorly.