Your money: Let’s hope for a fairer, more honest 2015

Poor service from banks and energy companies has sadly been a theme this year

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The Independent Online

Has much improved this year? I started the year writing about poor service from the likes of banks and energy companies and have ended the year writing almost the same.

But there have been some interesting success stories along the way. For instance, I suggested that the rapper Sean Combs, formerly known as Puff Daddy and P Diddy, should set up his own bank. Why? Because he has become a successful multi-millionaire businessman, while many of our bankers face disgrace. In January, it was the former Co-operative Bank chairman Paul Flowers who was in the spotlight – more for his sex and drugs shame than his banking exploits.

Almost a year on, and his former bank has this month failed the Bank of England’s stress test – which measured how well it would do in a future economic downturn. The failure – and subsequent admission that it won’t make a profit for the next two years – is symptomatic of the complete disaster the bank became under Flowers’ chairmanship.

In February, I reported that around a fifth of all households in Britain have been forced to complain about their energy company. I wrote then that it means that if you haven’t been compelled to complain, then one of your neighbours probably has.

Of course, that news came as little surprise as “energy companies have proved to be leaders in putting up prices and giving us bad service for many years”. That’s a record they look almost certain to maintain for years to come, with Scottish Power currently under notice to improve its complaint handling record by January or face a sales ban.

I have also lambasted Bob Dylan this year for taking cash to flog lingerie. That was part of a wider piece complaining about celebrities – such as Sir Michael Parkinson, Annette Crosbie, Cilla Black and Carol Vorderman – lending their names to dodgy financial products.

My conclusion was that banks have been forced to pay out billions for mis-selling useless payment protection insurance so Sir Michael Parkinson and the rest of his money-grabbing mates should be forced to make things good out of their own pocket for every mis-sold loan or insurance they helped to trick people into buying.

Also this year, I reported on the folk who queued up to be paid double their money at a Lloyds Bank ATM at Mansfield Woodhouse in Nottinghamshire. It had been loaded incorrectly by a member of staff who put £20 notes in the tenner slot. It meant anyone withdrawing £100 was paid £200 and so on.

When the mistake was discovered word was quickly spread by jubilant people eager for friends to cash in and a long queue built up at the ATM. My view was that those who did so knew that it was an error and were morally wrong to cash in on it.

I was reminded of that earlier this month when online bargain hunters took advantage of a blip at Amazon Marketplace which left many items wrongly reduced to 1p for a short time. Some shoppers rushed to take advantage and then boasted on social media about buying stuff they didn’t need simply because it was so cheap.

But once again they knew that they were cheating someone, in this case a number of small businesses that were affected by the glitch. And by helping themselves to what were obviously mis-priced goods, they were on unpleasant moral ground again. My view? Why not report a mistake, rather than looking to profit from it?

All these stories show that little has changed in 2014. But my hopes for more positive outcomes in 2015 remain undimmed. Hopefully, this time next year, I’ll be able to praise banks and energy companies, and we’ll all live in a more honest, trustworthy world where celebrities don’t lie to line their own pockets at our expense.

Good financial nous has to start in childhood

One subject that I’ve returned to time and again this year is financial education. It was added to secondary schools’ curriculum in September, but there’s still an awful lot of work to be done. The idea? To produce young adults who leave school with a real sense of the value of money so that they are less likely to fall into debt problems.

The fact is that only around half of schools in the UK follow the National Curriculum. Meanwhile financial education is not statutory at primary schools.

That’s not good enough, reckons Maike Currie of Fidelity Personal Investing. “Waiting until children reach their teens to teach them about money is too late,” she told me.

She points out that on average, children own their first mobile phone at eight and already buy items online at 10, often using their parents’ or older siblings’ credit or debit cards.

Children can open a bank account and have a debit card at age 11, and every day children are exposed to a deluge of payday loan adverts on television. “It is crucial that children in primary school are taught about finances. The fact that it is not is a major shortcoming,” Maike says.

Of course, parents have a huge responsibility – which I know only too well as the father of two boys. But research by Nationwide suggests that adults are viewed by their children as bad spenders.

Many children think their parents are a poor example because they waste and overstretch their finances each month by spending money on non-essential luxuries. A quarter said parents wasted money on cigarettes and alcohol, while around a fifth said they overspent on gifts nobody needs.

Michael Steer, a deputy headteacher and star of Channel 4’s Educating Yorkshire, said: “It’s vital that parents have a frank and open conversation with children from an early age about how finances work, so when they do stand on their own two feet they have the skills to manage their money effectively.

“Parents can and do help model good behaviours when it comes to money, including allocation of pocket money or paid-for chores, while financial services providers can do their bit.”

There are many different education schemes from banks and insurers – indeed Nationwide launched a youth account this year that comes with a range of financial education support. While I welcome all such help, schools should be teaching basic money management and budgeting to give kids respect for money. I’ve made a new video discussing the issue and the importance of financial education for children with Maike Currie, which you can watch at ind.pn/1zs5iXg

Sean Combs: Could he run a bank?

The rapper has transformed himself into a successful businessman, welcomed into boardrooms across the world.

His non-music business ventures include the clothing lines Sean John and Sean by Sean Combs – for which he earned a Council of Fashion Designers of America award. His products include a men’s perfume called I Am King.

He also owns a movie production company and has launched two restaurants. But crucially, he has gone into global partnership with leading brands such as Ciroc vodka and DeLeón tequila, the latter of which was a 50-50 deal with the British drinks giant Diageo.

Can a bank takeover be far away?

s.read@independent.co.uk

@simonnread

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