The penny has dropped: you can switch accounts
SLOWLY but surely, bank customers are waking up to the benefits of switching accounts. A recent report confirmed as much, indicating that 2.5million switches have been made since the ‘current account switch service’ was launched by banks and building societies in 2013 to quicken up the process.
Under the service’s terms, switches should take no longer than seven working days to complete, with all direct debits and incoming payments (salary, for example) moving across seamlessly. Any glitches result in a full refund of interest and charges.
A whole raft of new ‘challenger’ banks have used the freeing up of the current account market to entice customers with the big five banks (Barclays, HSBC, Lloyds, Santander and Royal Bank of Scotland) to move away.
They have been successful. One reason is because of a commitment to customer service, something which the traditional banks constantly fail to deliver on.
Fairer Finance, a company set up by former financial journalist James Daley to rank financial providers according to how they treat customers, has just come up with its latest ‘fairness’ tables for current account providers.
The rankings take into account a number of key factors, including how complaints are handled; how trustworthy customers think their bank is; and how ‘happy’ they are to be with the financial institution.
The results confirm that it is the challenger banks – new and old – that are providing the best service. First Direct leads the way, followed by Cumberland Building Society, Metro Bank, and building societies Nationwide and Norwich & Peterborough.
In total, 22 current account providers are analysed. It will not surprise you to learn that the big banks – bar Lloyds – are to be found in the lower reaches of the league table – HSBC (16th), Barclays (17th), Santander (18th), NatWest (19th) and Royal Bank of Scotland (21st).
Daley hopes that by publishing the rankings, the renegades will be pressured into upping their game. Anyone looking to switch account should use the table in assessing which institution to turn to.
IN ALL the hoo-ha over the implications of last week’s Budget, it is easy to overlook an important report produced by the House of Commons Work and Pensions Committee. A report that could determine how women will fare financially in retirement.
It relates to changes in state pension age and, in particular, the information void that many women born in the 1950s have suffered from at the hands of the Department for Work and Pensions.
Women used to be able to draw their state pension from age 60. But Government changes in 1995 and 2011 have pushed this back. The result is that by 2020, women will not receive a state pension until age 66.
Unfortunately, many women were not told about these changes – or were informed too late. The result is that they face hardship while waiting for their state pension to kick in.
Two weeks ago, The Mail on Sunday’s star columnist Peter Hitchens highlighted the financially devastating impact of this delay on 61-year-old Kate. With no husband or partner to support her, and with little prospect of getting a job, she has no choice but to batten down the hatches until she is allowed to receive her state pension.
The Work and Pensions Committee, chaired by the eminently sensible Frank Field, believes there is a solution for the likes of Kate. It lies in the Government allowing women of her age to access their pension early in return for a lower weekly payment for the duration of their retirement.
The proposal would be cost neutral so George Osborne wouldn’t get his knickers in a twist. It also makes great sense.
Baroness Altmann, Pensions Minister, should consider it as a matter of urgency. It’s fair – and fairness used to be Altmann’s middle name before she became blinded by the bright lights of political power.
LAST Tuesday, I was due to meet with a representative from the Money Advice Service, launched five years ago by the Government to provide free financial information to the public. It was cancelled at short notice.
On Wednesday, I understood why as it was confirmed that MAS was being disbanded as part of an overhaul of all financial guidance services. As well as MAS, there is Pension Wise and The Pensions Advisory Service.
The dismemberment of MAS cannot come quickly enough. It has squandered money throughout its life, serving no one but the executives who oversee it. I would do away with all three. But no doubt a phoenix will rise from their ashes, doing little but to squander more taxpayers’ money.