There has been quite a bit of coverage this week about how savers want savings accounts to be simpler. This is following some research from Ford Money that reveals that 77% of UK savers say banks should make savings accounts easier to understand. We’ve put together our thoughts on this – take a look here.
And it’s not just the terms and conditions of the accounts themselves that can be bewildering. As an article in the Financial Times pointed out, the number of savings products available, including cash ISAs, is apparently at a six year high – despite low interest rates and therefore waning enthusiasm. So, it’s increasingly hard to make a choice - although I would add that the ever-increasing presence of the challenger banks in the cash ISA market is good news, as it is driving interest rates upwards.
Further to NS&I’s dramatic recent decision to slash the maximum amount allowed into its Guaranteed Income and Growth Bonds from £1m per person to just £10,000, Sylvia Morris in Wednesday’s Money Mail questions whether NS&I could be set to cut some rates or reduce maximum deposits on other accounts this year, as their funding requirement is at its lowest level for five years.
NS&I has been set a target to raise £6 billion (plus or minus £3 billion each side) between 1 April this year and 31 March 2019 and the reduction in the maximum deposit of the bonds was the first step towards stemming the flow of cash pouring in.
Even though NS&I accounts are not always the most competitive, due to the unique protection given to ALL funds deposited (not just £85,000, as with the Financial Services Compensation Scheme) these accounts remain extremely popular.
Back to the ongoing saga of the future direction of interest rates…
Anne Ashworth in The Times reported that not everyone thinks that Andy Haldane joining the hawks of the MPC last week, by voting for a base rate rise, makes a summer increase a dead cert. She says that “the sceptics say that the Haldane swerve was designed to bolster sterling in the short term and supress an upward move in inflation and that the Bank of England will delay a decision until the Autumn.”
Finally, there was news out this week that the Competition and Markets Authority (CMA) is launching enforcement action against a number of hotel booking sites that it believes may be breaking consumer protection law. Part of this investigation includes concerns over how results of the way that hotels are ranked may be influenced by factors such as the amount of commission a hotel pays the site.
This has raised some interesting questions around the benefits of these sites and the prominence that some give to products which they are paid to promote.
Although businesses, like ours, fundamentally have to make money to survive, misleading consumers should not be the way to do it. And poor practice by some, means that consumers may worry about whether they can trust the results they are presented with.
At Savings Champion, while we do not consider ourselves a comparison site - we do monitor the whole of the UK savings market and provide best buy tables, among other tools, to give savers information about the very best rates on the market. This means that we are often lumped together with comparison sites.
But, importantly, our best buy tables have not and will not be influenced by any commercial relationships – so accounts are listed on our best buy tables by merit, not because we will be paid to display them. Although we are sometimes paid, this is clearly highlighted.
We always try to include at least one account that isn’t online only, for the numerous savers who would prefer to open and manage an account by more traditional methods.
We also take into consideration the customer experience in opening and managing accounts. And this means that we may not include a provider if the overwhelming feedback or our own experience is negative. In this situation we will try and work with the provider to suggest how they could improve their customer experience.
We know it can be done with the customer in mind first and foremost, so would hope that other businesses commit to treating their customers fairly. Otherwise they are simply giving the industry a bad reputation and may eventually leave consumers too cynical to use comparison services at all.
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