While you're away, it's raining on your cash

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The Independent Online

You aren't really getting away from it all if you stash weighty tomes onmortgage lending beneath the swimming gear and towels in your suitcase.

Yet brushing up on how to conserve your cash while sipping a seabreeze cocktail isn't such a bad idea. For while you relax this summer, many banks, building societies and insurers aren't in a holiday mood. Instead, they're busy cutting interest rates on savings accounts, clamping down on companies that help victims of the mortgage endowment mis-selling scandals, and quietly axing good deals.

For savings cuts, it might seem unfair to pick on any one lender, as most have done so in the wake of this month's reduction in the Bank of England base rate.

But one that has dealt customers a particularly duff hand is Universal building society. It first cut rates across a number of products by up to 0.25 percentage points on 18 July, and then - barely four weeks later - slashed them again by up to 0.4 percentage points.

Pity the poor customers who, just one month ago, were enjoying rates of 4.35 per cent on any savings above £1 in Universal's Regular Saver Plus bonus account. Today, they're getting just 3.7 per cent.

It's not much better with home loans. A surprisingly miserly Nationwide has passed on just a 0.1 percentage point cut in its standard variable rate (SVR) to borrowers, leaving it at 5.89 per cent.

Although its SVR is one of the lower rates available to customers, the building society has still decided to keep hold of the lion's share of the Bank of England's cut for itself.

Elsewhere, companies that sold endowment mortgages are also rather preoccupied.

Abbey - like Prudential - will no longer send compensation for mis-selling to any companies (known, unflatteringly, as "ambulance chasers") that handle claims on behalf of an individual, it emerged last week.

This "moral" stance is based on the contention that consumers shouldn't have to give up a chunk of any compensation to a third party.

Bradford & Bingley has gone one step further, sailing close to the regulatory wind by refusing even to talk to claims handlers unless the customer absolutely insists on it.

This really is an unsightly scene. When the very companies responsible for mis-selling endowments in the first place start telling customers what's good for them, that's reason enough to raise an eyebrow.

Let's not forget that Abbey was recently fined £800,000 for mishandling its endowment compensation processes, and forced to reopen thousands of previously rejected cases.

Unfortunately, the endowment claims handlers don't inspire much faith either.

Although they help administer the claims process on behalf of consumers, they do so for a fat fee.

There's nothing to stop individuals making a compensation claim themselves - and no difference in the outcome. Rejections by the endowment companies can be appealed against and, in dispute, taken to the Financial Ombudsman Service.

As for disappearing deals, the Woolwich is tomorrow withdrawing its Offset Together mortgage - a loan that lets parents help their kids on to the property ladder by allowing them to benefit from the offset value of family savings.

The Woolwich blames poor demand - only a few thousand customers bothered to take it out during its four-year life, a spokeswoman says - but the loss of a choice for those struggling to get on the ladder is a shame.

It's astonishing, really.

Close your eyes in the sun for a couple of weeks and, when you open them again, everything has changed.

You may be on holiday but you'd be wise never to relax with your personal finances.

As you rifle through post and missed phone calls upon your return, make a mental note to check what kind of behaviour your bank has been up to.

The wager is that it's "no good".


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