Simon Read: They do what they want. It's time to bring banks to heel - Spend & Save - Money - The Independent

Simon Read: They do what they want. It's time to bring banks to heel

 

I wrote earlier this week of my anger at the banks and building societies that rip us off by quietly reducing the interest rates on deposit accounts.

I reminded long-term readers of my rage on discovering that my own savings account had been changed behind my back to pay interest of 0.1 per cent.

So I'm glad the City watchdog is finally taking action about the shabby practice. Millions of savers have been hit as big banks deliberately penalise loyalty by paying peanuts.

You may recall last weekend that I reported on the experiences of Independent reader James Simpson, whose Royal Bank of Scotland Isa had its interest rate slashed.

James's tongue-in-cheek proposal of "keeping my money in a box under my bed" was then taken up by another reader. But Robert Johnson went further: "Why don't we all put our savings under the bed? Just temporarily. It would make more than the banks sit up."

I agreed. And so do many of you. So perhaps we organise a day of protest around the time of the next election by withdrawing our mouldering savings? Maybe we should arrange for a giant bed in, say, Trafalgar Square, so we have a potent image for the protest.

In the meantime, another reader writes in with a similar tale of savings woe – and a warning. "The banks try to rob us at every turn," says Stewart Mowatt, who wants to draw your attention to what he thinks is one of the tricks employed by the banks to legitimise their actions.

"A friend of mine who used to work in a bank had customers complaining from time to time that their accounts were now attracting a derisory rate and that they had never been informed of the change," he reports.

"Often, it transpired that the customers, as so many of us do, had ticked the box on a communication from the bank to say that they did not wish to receive offers, information and the like from the bank. Checking this was the first reaction of the bank to any complaint. The bank felt that this discovery absolved them from responsibility for their actions," Stewart says.

In reality, as he then goes on to point out, there should be a clear distinction between advertising communications and essential information relevant to your accounts.

"The moral would seem to be not to tick such boxes and elect to receive all communications and read them, however dull," he advises.

Given the amount of marketing guff spouted by banks, this could indeed be a tedious process. However, it really shouldn't be necessary. If banks are failing to let savers know that their accounts are now rubbish and offering paltry interest rates, they should be forced to do so.

Even better, they should be forced to stop the odious practice of quietly reducing rates to almost nothing.

Your guide to the new age of pensions

From next April the pension rules are being relaxed so that people are no longer forced to buy an annuity with their retirement savings. But what do the rules mean for us and what should we be doing now?

I know that many readers still feel confused about the new opportunities, so I've made a video with the pensions expert Alan Higham, head of retirement savings at Fidelity Worldwide Investments, to find out what we need to know about the new world of pensions.

You can watch the video at the Independent website now by going to ind.pn/1jxgkp3.

We are planning more video guides in the coming months, so do let me know if there are any subjects you'd like us to cover.

s.read@independent.co.uk

Twitter: @simonnread

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

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