Tories, banks, and utilities a thought

Imnoexpert_2

So the government plan to force Utilities to put customers on the best tariff. What a good (though unworkable?) idea.

Can we look forward to them applying the same logic to the bankers? Imagine a world where you didn't have to check regularly if the variable rate on your account had suddenly dropped from 3% to 0.1%, or keep tabs on the 'bonus' period which you might have forgotten about, or watch out that your Cash Isa had been superseded by an ISA Plus, then an ISA Plus Extra, then an Extra Plus Bonus ISA.

I have just helped a relative who had been enjoying 0.1% interest on their forgotten ISA. On challenging HBOS who haven't sent any statements for several years their reply was that they are not obliged to notify of rate changes or to send statements.

Can anyone see a difference in principle between what is proposed for utilities and banking? Let's have a rule which makes banks move money to similar savings accounts in their institution (including their other brands) with the best rate. A customer could of course object if they didn't want this to happen.

How radical are you Mr Cameron?

Glen_Clark

Imnoexpert wrote: »

How radical are you Mr Cameron?

lol Cameron is backtracking already.


The Prime Minister plunged energy policy into confusion with his surprise announcement that the Government would legislate so that gas and electricity companies "have to give the lowest tariff to their customers".
Energy Secretary Ed Davey distanced himself from the proposal and No 10 said energy firms would be obliged only to "offer" the cheapest tariffs.
Mr Cameron, attempting to clarify his statement, stopped short of repeating his previous suggestion that companies would be compelled in any way to put customers on the cheapest tariffs.
Arriving in Brussels for an EU summit, he said he wanted to be on the side of hard-pressed people "who struggle to pay energy bills".
source: http://www.independent.co.uk/news/business/news/energy-watchdog-to-force-disclosure-of-cheapest-tariff-8218124.html

nicknameless

If it were logic (one has to use that word loosely where politics and politicians are concerned) it would apply to any product with in excess of one supplier i.e. capitalism.

It's a political sidestep to do nothing, whilst appearing to do something. If the best tariff is still an above inflation pseudo-monopolised rip off tariff it doesn't address the fundamental problem of a market which consumers can't opt out of (without suffering hypothermia and boosting the share price of candle companies).

Sceptic001

"The nine most terrifying words in the English language are, "I'm from the government and I'm here to help."

-- Ronald Reagan

nicknameless

Glen_Clark wrote: »

lol Cameron is backtracking already.

Mr Cameron, attempting to clarify his statement, stopped short of repeating his previous suggestion that companies would be compelled in any way to put customers on the cheapest tariffs.
Arriving in Brussels for an EU summit, he said he wanted to be on the side of hard-pressed people "who struggle to pay energy bills".
source: http://www.independent.co.uk/news/business/news/energy-watchdog-to-force-disclosure-of-cheapest-tariff-8218124.html

Nearly fell off my chair with incredulity reading that one. Did Dave tweet it?

grey_gym_sock

energy is a fake market.

it's a monopoly (only 1 electricity grid, and 1 gas pipeline network). the monopolist's profits are controlled by regulation, whether or not effectively (national grid). there would only be real competition if somebody built a rival grid.

the "suppliers" don't really supply customers, they just supply energy to the grid, and provide billing and meter-reading services to customers. get rid of them. have 1 national tariff. purchasing energy for the grid, and billing and meter-reading, could either be centralized or contracted out. job done.

Rollinghome

I'd agree that there is a serious problem with the use of "confusion marketing" that's rife in all consumer facing businesses. Just go into Tescos to buy a few apples or packet of soap powder to see it at work.

It particularly hits the more vulnerable and is probably indicative of the general loss of morality by our greedy business leaders.

For electricity and gas, I'm on the "SooperDooper Hardly Costs You Anything (version 16)" tariff. There seem to be another 15 versions of the SooperDooper tariff all slightly different in the way they work and charge.

I suspect someone is trying to deliberately confuse me and that needs to stop but I haven't thought about the precise mechanism for that. That's what I pay Dave and his mates for.

Similarly with savings rates. Someone is sure to point out that it's only because someone else is being paid 0.05% on their instant access account that I'm able to get 4%. They'll rightly tell me that I'm being subsidised by the less astute.

As a shareholder in the gas and electricity companies I can also benefit from the increased profits from those customers who are being ripped off.

That may be so but it doesn't make it right or, some would say, honest. I'd like to see all consumers and savers treated fairly and honestly, especially the vulnerable, and, if politicians can find ways to encourage that, then let's do it.

jimjames

Whilst I have some sympathy with those who are elderly and not able to use a computer for most people it isn't actually that hard to check & switch to the best deal via a number of sites like uSwitch or Which.

Enter your details and bingo the best deals pop up sorted by saving or whatever criteria you want. I'm always surprised by the number of people who have never switched and could therefore make the biggest savings. This story has been on the news repeatedly for many years and every time there is price rise but seemingly people don't bother switching.

It isn't hard to do so why is that? I don't know the answer but when budgets are under pressure and you can save £300 from 5 mins work and a few clicks it seems like a no brainer to me.

If you haven't ever switched why not? I'm genuinely curious for the reasons especially for anyone who is on this site!

psychic_teabag

The comparison sites do make it easy to search the tarifs. But if you don't quite trust such sites (they are after all out to make money for themselves, and they don't always make it clear whether the numbers they are using are before the advertised rate increases, or after), it is very hard to actually compare tarifs yourself to double check. The maths isn't all that hard, but it's very time consuming to work it all out for even just a small number of tarifs you want to consider, what with the dual-priced units, etc.

My mum, for example, just can't be bothered switching. (She told me quite proudly the other day how my brother-in-law had saved her £X on her car insurance by going on the internet. I told her she could probably save fare more than that by switching power, but that's too much trouble. And I still don't think she's ever got round to sorting out her call charges.)

nicknameless

jimjames wrote: »

Whilst I have some sympathy with those who are elderly and not able to use a computer for most people it isn't actually that hard to check & switch to the best deal via a number of sites like uSwitch or Which.

Enter your details and bingo the best deals pop up sorted by saving or whatever criteria you want. I'm always surprised by the number of people who have never switched and could therefore make the biggest savings. This story has been on the news repeatedly for many years and every time there is price rise but seemingly people don't bother switching.

It isn't hard to do so why is that? I don't know the answer but when budgets are under pressure and you can save £300 from 5 mins work and a few clicks it seems like a no brainer to me.

If you haven't ever switched why not? I'm genuinely curious for the reasons especially for anyone who is on this site!

Yep those with a little nouse can switch between one monopoly inflated and unregulated tariff to another, saving a small proportion, but isn't that missing the central point?

Thank god nature has the monopoly on air for the time being.

gkerr4

surely us 'moneysaving experts" should be against this anyway? - surely all our bills are subsidised by those who are too lazy to check and stay on the same tariff for years on end - if this went through, then all our bills would go-up surely?