One of the many devious tactics the banks keep up their sleeves to make you think twice about switching accounts is to drag it out for such a long time that you’d rather chew your own toenails off than dare to do anything quite so insolent in the future.
With ISAs, though, it seems they have finally gone too far.
The Office of Fair Trading has published a report revealing the average length of time taken to transfer funds from one account to another is a staggering 26 days – that’s average, remember – which is diddling the two million savers who can bring themselves to go through this painful process out of the higher rate of interest, and often means they earn nothing at all for around five days while funds are floating around the ether somewhere.
The OFT has now said this should fall to 15 days by the end of this year – on its own this would see customers gain an extra £14.5m in interest a year – and eventually down to just a few days.
It also criticised the banks for failing to print interest rates on statements – just 15% do this – and for their willingness to charge customers for missing loan or credit card payments by just one day while refusing to pay any interest while ISAs are transferred. All in all, a thorough dressing-down, and one of which we should all whole-heartedly approve.
Shy about retiring
It’s no surprise that paying money into pensions takes a bit of knock in a recession but the number of people saving enough for their retirement has now fallen to just 48%, according to a survey by Scottish Widows.
The total has fallen by 6% over the last year and now stands at the lowest level since 2006. Surprisingly, women over 50 are the worst offenders, the survey says; with 26% not saving at all compared to 60% of men in this age range. More generally, a fifth of those who could afford to save said they were not doing so; hardly the brightest idea, even if you’re not convinced of the merits of pensions as the best vehicle.
If we collectively keep this up we’ll either have a whole generation living as we did in the aftermath of the Second World War or one where people have to get used to working well into their 70s and even 80s.
Meanwhile, the BBC has become the first publicly funded organisation to attempt to tackle its pensions commitments. The final salary scheme has been closed to new entrants while existing members of staff will have their pensionable salaries capped at 1% a year.
This is likely to be the start of a wider clampdown that could mean millions of public sector workers having to up their contributions substantially to receive the level of retirement income they have been expecting. This one is likely to run and run, especially if it spills over into industrial unrest, as seems likely.
House of pain
It appears the other old staple to pay for retirement – the housing market – may be about to take a bit of a turn for the worse, if Nationwide’s latest survey is accurate. Despite taking a severe battering during the credit crunch, prices have been rising of late and the average house now costs around £170,000.
But, according to the UK’s biggest building society, they rose by just 0.1% in June after a paltry 0.5% increase in May, taking the annual rate down to 8.7%, and the unusually strong performance in the second half of last year means this figure is likely to fall sharply.
Prices themselves are likely to stagnate over the rest of this year as the abolition of home information packs has seen more houses coming on to the market.
Some slight relief for anyone concerned about the prospect of losing their home, with new guidelines issued by the Financial Services Authority preventing mortgage providers from applying a monthly charge where repayment arrangements are already in place, and insisting that any payments made by customers must be allocated to clearing monthly obligations rather than penalty charges.
If you’re in this predicament already it’s unlikely this will prove the difference between keeping a roof over your head and not, but it might mean those who are struggling have more chance of staying in control of their other expenses, perhaps avoiding bankruptcy in the process.
Rage against the machines
It seems the banks, unfortunately, aren’t the only ones with a track record when it comes to being less than entirely candid with their customers.
Train companies could certainly give them a run for their considerable amounts of money, and their reputation has hardly improved with the suggestion that their ticket machines – usually used by those in a hurry or at peak times of day – fail to allow customers to buy cheaper tickets for off-peak journeys in advance.
Passenger Focus claims people often have no choice but to pay full fare or risk missing their train by queuing up at the ticket desk to obtain the cheaper rate. The lobby group says it has raised the issue with rail companies, which claim to be looking into the issue. In the meantime, it’s a reminder to find out in advance what the cheapest ticket is for your journey and to leave enough time to argue the toss with the ever-so-helpful customer services assistant at the desk if necessary.
Ready to roam
Better news this week for those who use their mobile phones abroad, after new rules came into force preventing calls once a limit of €50 (£41), excluding VAT, has been reached. Customers will receive a warning once they have reached 80% of that total and will have to specifically request to use the phone above the threshold.
The new rules would have helped those forced to use their phones when stranded abroad during the recent disruption caused by the Icelandic volcano, although this will be scant consolation for those struggling to pay bills of hundreds of pounds.
Operators will also be forced to inform users of their roaming charges when they enter another country. The new setup only applies to the EU though; anyone travelling outside that area is still likely to be hit by vastly excessive charges, even for limited use.
Farewell, old friend
Finally, this week saw the end of the line for the £20 English banknote featuring the face of the famous composer Edward Elgar. The note, which was first introduced in 1999, has been gradually phased out by the one featuring the economist Adam Smith (who doubtless would be less than impressed with the near-collapse of capitalism in recent years) that was introduced in 2007.
Anyone who happens to have a stash of the old £20 notes can attempt to exchange them at banks, building societies and post offices, although the only sure way of redeeming them is to send them to the Bank of England. Unless, of course, you fancy holding on to one or two, in the hope that one day they’ll be worth considerably more as memorabilia. With all the others heading for the shredder, it could be worth a pop as a long-term investment.
