Time to end shoddy treatment by banks and building societies

It’s bad enough having to put up with miserly rates of interest, but banks and building societies ‘ behaviour towards savers just compounds the misery.

Just setting up a new savings account these days can sometimes be a nightmare.  Endless anti-money laundering and security checks make it all horrendously tiresome.

Once you have cleared all these hurdles, you then have the job of managing the account, while keeping abreast of all the terms and conditions, which seem to be getting increasingly complex.

Its all in the detail

For instance, most top paying accounts incorporate an introductory bonus lasting six to 12 months, after which the return is likely to fall off a cliff, so you have to keep shifting your hard earned cash around to keep up with the best rates.

Then there are varying notice periods and limits on the amount and number of withdrawals you can make in one year.

The Nationwide eSavings Plus account, currently paying 2%, can’t be closed after three withdrawals, (when the rate drops to 0.1%), so savers who slip up on this are locked into this paltry rate for the rest of the year. It’s the financial equivalent of being mugged and imprisoned, all in one go! … Continue Reading

Savers, cash cows for the banks and the government to milk at will

The drastic action taken by Gordon Brown to fix the banking crisis now seems to be paying off for the sector and the new Government alike.

The banks are starting to look in good shape; Lloyds Bank Group has announced a massive pre-tax profit of £1.6bn and RBS are showing good signs of recovery and, of course, they continue to pay out those notorious bonuses.

It is going well for the Government too. Its investments in the banks look set to create a healthy return when it sells its shareholding onto savers and pension funds, enabling them to buy back much of what they already owned before the crisis. And of course the populist tax on bankers’ bonuses is thought to have raised some £1.5bn in very welcome extra revenue for the Treasury’s coffers. On top of this, details of the new bank levy are emerging and Chancellor Osborne has announced that he intends for it to generate an annual £2.5bn for the Government. … Continue Reading

To the OFT – Banks need a kick up the backside, not guidelines

Am I alone in feeling totally underwhelmed by the OFT’s response to the ‘super complaint’ on cash ISA transfers?

While any improvement in our financial institutions‘ current dire performance would be welcome, the OFT’s recommendations will do little to shake banks and building societies out of their current complacency when it comes to customer service.

The OFT’s recommendation that cash ISAs should show the interest rate payable on statements from May 2012 is quite frankly pathetic. Why can’t banks and building societies do so now, and while they are at it, why not publish the interest payable on all savings account statements, instead of customers having to search the internet to find the correct prevailing rate (and even then it may not always be correct)?

… Continue Reading

Banks fighting for savers deposits

Savers benefit from deposit competition – this may sound fanciful to us, but this was the headline of a recent press release from the Reserve Bank of Australia (RBA).

In a recent speech Malcom Eday the Assistant Governor of the RBA said that the recent financial crisis had focused attention on the need for stable funding. This has contributed to a move away from the short-term wholesale funding to greater competition from banks for retail deposits. He also said that prospective regulatory developments are going to put more emphasis on stable deposit funding.

Currently in Australia deposit rates of 6% are not uncommon, with inflation at 2.9% that’s a return far beyond anything UK savers can currently achieve. On top of this from July 2011 reduced tax rates will be charged on the first $1,000 of interest earned each year.

Our new government has announced its intention to introduce a regulatory framework that promotes responsible and sustainable banking. Maybe if this includes more emphasis on deposit funding from UK savers we will end up with a stable banking system with greater competition for savings that will generate the returns that savers deserve.

We trust banks with our money, but can we trust them to treat us fairly?

Banks really do like to push savers round.

I don’t mean in a gentle mocking playground manner, with teasingly average interest rates and cheeky account Ts & Cs.

I’m talking brutal bully-boy behaviour, shoving customers roughly up against the wall to then merrily mug them in blinding daylight.

You can feel the frighteners from just a glance at their money menaces.

First up, theft of your tax-free allowance: some banks pay comedic rates on cash individual savings allowances (ISAs) as low as 0.1%.

Such generosity means you’d need normally need to bag all of….0.125% to earn this. … Continue Reading

It’s about time savers made their complaints heard

Savers can be a timorous bunch.

If you’re earning a miserable 0.1% in your high-street savings bank account – and I’ll wager hundreds of thousands are – who have you complained to?

Exactly.

Big bouquets, at least, go to those who express their disgust and up sticks with a move to a rival bank for a more generous rate.

Brutal brickbats for the rest who silently fume at the miserly rates on offer yet do nothing about it.

But what savers of all hues do share, however, is an aversion to taking their complaints at crummy rates to the very top – to the Financial Ombudsman Service (FOS).

Only a ‘handful’ of gripes about piffling savings account interest rates are posted to its door each year – and the majority of those relate in particular to a subsequent poor experience where money earmarked for secure savings ends up being funnelled into an inappropriate investment.

Yet instead of the FOS bearing the brunt of their ire, savers should be bawling out their banks after first having a pop at…themselves.

Savings are generally hard fought for, prised out of taxed salary after all other outgoings. … Continue Reading