High time that more banks paid for their mistakes

I Once had a job where I was fined for turning up late in the mornings. Elsewhere in the less-than-perfect financial world the Co-operative Bank automatically pays pounds 10 compensation to current account holders if, for example, it should make any mistake on statements or direct debits. I was cured of my lateness (until I left the job), and I bet the Co-op is working overtime to reduce the 600 times a month it is paying out.

But overall mistakes by banks have increased again after a previous improvement, according to the Consumers' Association (see page 22). Even if the banks are putting things right quicker, this is still a serious indictment of organisations that never seem to tire of telling us how they are improving customer service.

If the banks want us to believe they are turning the corner, automatic compensation payments should be the norm, not unusual. Midland, for example, also offers pounds 10 payouts if it screws up, but only when accounts are first opened or transferred.

I look forward to hearing of more moves for existing customers.

THE stock market hit a record high this week. Expect headlines warning of an impending crash and, in less respectable quarters, talk of how you really must pile in now to avoid missing out on such wonderful gains.

But whether you are presently in or out, the best advice is probably pretty much the same - sit tight where you are.

Yes, there might be a stockmarket crash or - in the quaint jargon suspiciously adopted by the City sometimes - a correction. But the downside for the stock market as a whole is probably little more than 10 per cent. Set against the gains accumulated by many who are already in, this might not appear too disastrous. And five years on it may not seem too important when you are up, say, another 40 per cent or so.

Underlying

this advice to not panic are the costs and troubles of trying to second- guess the stock market. Yes, if you wanted your money out to spend, run for the door. But if you're in the market because in the long run you think it's the best home for your savings - and by and large it probably is - then don't be in such a hurry. It could easily cost 5 per cent of the value of your investment to sell up and then reinvest at a later date.

Equally, however, if your life's savings are in the building society now is not the right time to be throwing everything into the stock market when it is so perilously high. Either drip feed a regular monthly amount into the market - many PEPs and unit trusts have this facility - or wait awhile.

Your Money has 10 free copies to give away of Which? Way to Beat the System, a new book from the Consumers' Association. The book is aimed at steering people through the bureaucracies that govern our lives, including the financial system. The book costs pounds 9.99 from bookshops. But it's free to the 10 most interesting notes from readers telling me how they've beaten the financial system. Write as succinctly as possible to: Beating the System, Steve Lodge, Personal Financial Editor, Independent on Sunday, One Canada Square, Canary Wharf, London E14 5DL.