Savings death trap
NATIONAL Savings & Investments may be offering the best rates — but many of its savers are far from happy.
Over the past two weeks, we’ve been inundated with letters and emails from readers questioning whether they should pull their money out of NS&I accounts.
It comes after Money Mail revealed that the Government-backed savings organisation — which has 25 million customers — will allow the bereaved to withdraw only up to £5,000 from a loved one’s account without going through the lengthy and arduous process of probate.
When someone dies, the next of kin is overwhelmed with tasks — informing family and friends, registering the death and arranging a funeral. You’re exhausted even before tackling their financial affairs.
However, if the estate is small and no property is involved, you shouldn’t need a grant of probate — which can take six months to obtain and involves swearing an oath at a solicitor’s office, plus paying a £215 fee.
Most banks and building societies will release £25,000 to £50,000 of a loved one’s savings if you present the original death certificate and proof of identity. So you should be able to complete most paperwork within weeks.
Unless, that is, you have an NS&I account.
The organisation demands that relatives face the probate gauntlet for anything more than £5,000. This is particularly frustrating in the case of premium bonds.
These can be held only in one name. So even if you were married for 50 years, and held everything else in joint names, you must apply for probate if your partner’s premium bonds are worth more than £5,000.
This bureaucracy is putting loved ones in their 80s and 90s under extra stress, which is avoidable.
So why is NS&I so chronically out of kilter with the banks?
It says it must be more risk-averse than commercial organisations as it has ‘responsibilities to ensure that public funds are protected’.
Yet I can’t imagine the likes of Lloyds and Barclays putting thousands of pounds of their customers’ cash at risk.
One reader asked her MP to write to NS&I about the problem. It wrote back: ‘As NS&I deals with 400,000 death claims each year we do not have the capacity to carry out comprehensive investigations into each and every situation of a bond holder.’
In the modern world of credit checks and online databases, it is hard to believe it’s so difficult to check that an elderly widow is who she says she is.
In 2015, Money Mail launched its Looking After Your Legacy campaign for banks to improve the way they treat families grappling with their loved one’s finances.
The response was phenomenal and service has improved ten-fold. Can NS&I please catch up?
Renewal con
January is my least favourite month. It’s cold, dark and, worst of all, my car insurance quote is due.
Every year renewing my policy is a pantomime. First, the insurer hikes the price by about £100 (even if I’ve made no claims). I tell them I’ve found a cheaper deal and threaten to leave. They then offer a slightly cheaper deal. I say this isn’t good enough. They then match the price and I stay. What a silly routine it is.
But then last week I received a quote that was £84 cheaper than last year. You could have picked me up off the floor. Could it be that insurers are finally giving existing customers a fairer deal?
New rules from City regulator, the Financial Conduct Authority, mean that from April, insurers must tell customers what they paid the previous year on renewal letters — so they can easily see if the cost has gone up.
Still, £84 saving or not, it won’t stop me shopping around for a better price.
It will be a long time before existing customers get the same rock-bottom prices as new customers.
Budget-happy
HELLO, my name is Victoria Bischoff and I’m addicted to an app on my mobile phone that helps me budget.
Since I bought a flat in October, money has been flying in and out of my bank account at an unbelievably fast pace.
It’s made it almost impossible to keep track of whether I’m living within my means or eating into savings earmarked for something more important than kitchen tiles and bathroom bins.
A friend suggested downloading the app called Daily Budget on to my smartphone. At first, I turned my nose up at the idea. What’s wrong with a good oldfashioned pen and paper, thank you very much? But as my spending took off, I gave it a try. And, oh, how addictive it is. You enter your monthly income, what you spend on household bills and how much money you want to save. You can also note any large expenses you have coming up — such as holidays or a new boiler, in my case. The app will then calculate how much you are able to spend every day without slipping into the red. Each time you buy anything you take ten seconds to jot it down in the app. It’s incredible how quickly you’ll put your card back in your purse to avoid going over budget for that day. I’ve never had a piece of paper shame me in quite the same way. It’s also so much more convenient. You can pay for that coffee with one hand and update the app with the other. But perhaps my favourite bit is the graphs that analyse where you spend your cash. Admittedly the graphs cost £1.99 to activate, which may go against the whole idea of better budgeting. I’m sure that the novelty will soon wear off. But if it sees me through this time of budgeting crisis, I’ll be eternally thankful. DAN HYDE IS AWAY