Julian Knight: Better branch training will help all savers
Nationwide's new savings watch scheme is a good idea, so long as its staff don't stymie it
Sunday 17 June 2012
Nationwide customers will now be told if the society has launched a savings product that pays a better rate than the one they are receiving. This is a nifty idea and part of its commitment on savings, which it began last year by paying interest on Individual Savings Accounts from the day the customer signs up, rather than when the cleared funds arrive.
But savers will have to actively opt into the "savings watch" scheme, which involves some mouse -clicking and ticking of boxes, which will put off most who could benefit. What's more, this helpful approach is not replicated in its branches. When I have tried to move to a better rate with the Nationwide, I was told – wrongly – by branch staff that I need to provide copious ID, despite already being an account holder. This meant I missed out on the better rate until I could sort this out .
At the time, I wondered if this was deliberate obstruction to deter me from switching, but in reality it was yet another example of misinterpretation of the money-laundering rules. Savings watch is a good idea, and I hope other providers will follow. But if staff were trained properly across the industry, then maybe people would be making much more of their money than they are at present.
At last, the White Paper
Incredibly it will be 12 years after Northern Rock's collapse that we finally have bank reform in this country. There are no surprises in the White Paper, published last week. The central aspect remains the splitting of banks' investment and retail sides, planned for 2019. Assuming the coalition stays together and a degree of cross-party support, the Paper should become law, but there is a caveat, and it's the same one as every aspect of our finances at the moment – the eurozone.
As the euro breaks up – as it could start to do after today's Greek elections – then we will be hearing a lot from the banks that we ought to leave well alone; that, ironically, separating investment and retail could weaken the latter, particularly if bad debts in the real economy start to mount up.
What's more, it is worth bearing in mind that, in the obsession with "casino banking", much of the difficulties arose through the over-reliance of banks – like Northern Rock – on wholesale funding and forgetting the basics of attracting savers and using that money to make a little margin in order to lend out to borrowers. Ring-fencing, by itself, won't stop another crisis from occurring.
Cutting out the chips
If the seemingly endless rain wasn't depressing enough; I went on the new Dewberry insurance mortgage calculator the other day. This works out the chances of surviving long enough to pay off the mortgage. Apparently, I have a 10.17 per cent chance of kicking the bucket before the home loan is (like me) no more. As a 90 per cent of the glass is empty sort of guy, I find this all, you guessed it, rather depressing. So instead of buying life insurance – which is no doubt what Dewberry want me to do – I now face the stark choice of cutting chips from my diet or overpaying the mortgage now.
An end to child poverty?
Child poverty is down in the UK, according to official statistics, but only because we are all poorer – most poverty measures are relative to average incomes. Perhaps, this is what Tony Blair was aiming for when he said he would end child poverty by 2020. At the time, I wrote it was unlikely to happen but the global downturn has made it possible by shrinking all our incomes. And the way the eurozone crisis is being handled, we may make 2020 after all.
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