Julian Knight: Weaning us off free banking won't be easy
If Lord Turner's wish to see a charge attached to all current accounts is to be granted, packaged deals will have to improve
Sunday 29 July 2012
I have never been a fan of packaged accounts – which bundle together lots of different insurance products with a slightly souped-up current account in return for a monthly fee. They are a way to get us to pay for something which has long been free, namely current account banking while in credit. Some people, I suspect, sign up believing these accounts raise them above the hoipolloi – if that floats your royal barge then bully for you, but for me it's a no thanks.
It seems the Financial Services Authority isn't much of a fan either. This week, it told banks they need to be more careful about how they sell these accounts. Clearly, with the payment protection mis-selling scandal in mind, the FSA wants banks to ensure that when they sell these accounts the adds-on are relevant to the purchaser. In other words, their personal circumstances don't bar them from claiming on the policies.
It's good that the FSA is putting the emphasis, finally, on the seller rather than the buyer. Bankers should not be able to hide behind caveat emptor. But, from the top of the FSA there is a different message. Lord Turner in his apparent attempt to land the Bank of England Governor's job has been saying that free banking should come to an end. This is music to bankers' ears, they really don't like bothering with all this free banking while in credit malarkey.
But what Lord Turner doesn't appreciate, or simply ignores, is that millions of Britons either cannot afford or simply do not want to start paying for their current accounts, even when travel insurance, mobile phone cover or, most bizzarely in the case of M&S Money's account launch, free cups of tea and coffee are thrown into the deal.
I'm afraid if the bankers and Lord Turner want to wean us off free banking they are going to have to do a lot better than the current crop of packaged accounts. I will hold on to my free banking for as long as I can and when my bank decides it doesn't want my business I will switch to an institution which does.
Four years on ...
On the closing day of the last Olympics in Beijing you could have a punt on Lehman Brothers' shares (a safe investment if I ever I saw one), arrange an interest-only or 100 per cent mortgage with little or no proof of income, or reply to one of the stream of marketing bumpf offering you an instant loan or credit card.
Suffice to say, things have changed beyond all recognition in the four years since the dousing of the Beijing flame, and, you know – double recession aside – most of it is actually for the better.
End the energy swindle
British Gas's soaring profits from residential customers is as clear evidence as you need that the energy sector is ripping off consumers.
The regulator Ofgem, which has in the past said it will take companies to task for being too quick to raise bills when wholesale prices move up and then too slow to cut them when the reverse happens, needs to follow up its words with some action. This energy rip-off cannot be allowed to continue.
Independent Partners; request a free guide on NISAs from Hargreaves Lansdown
- 1 Cyclist in Russia narrowly misses being hit by car and lorry
- 2 'F*ck it, I quit': KTVA reporter Charlo Greene quits live on air in spectacular fashion
- 3 What are your fingerprint words?
- 4 Gary Lineker involved in Twitter row after presenter rubbishes claims he will be warned by BBC over foul-mouthed tweets
- 5 Pink Floyd new album: Band unveil cover art for first record in 20 years
Scotland could still declare independence – even without referendum, says Alex Salmond
Scottish referendum results: Cross-party consensus collapses amid Tory-Labour spat on the 'English question'
Hilary Mantel 'should be investigated by police' over Margaret Thatcher assassination story, says Lord Bell
Plebgate MP Andrew Mitchell called officer a 'little s**t', claim court documents 'exposing ex-Chief Whip's 'record of abusing police'
Archbishop of Canterbury admits doubts about existence of God
Labour Party conference: Ed Balls to set out plan to freeze child benefit to balance books
iJobs Money & Business
£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...
£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...
£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...
Day In a Page
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green