MSE News: 'Teaser' introductory savings rates to be reviewed by watchdog

j0nathon2

I have never known a Bonus/Introductory rate with the banks I have used to be hidden in any way at all, the rates and dates they apply have been obvious. I switch in time to get a better rate elsewhere.

Kite2010 wrote: »

And as a result of the investigation the FCA bans any introduction bonus rates leaving the smart savers who shift their savings around worst off as all the banks ditch the year long bonuses and shift to <0.5%

Too true. The banks will just say "not our fault".

Whenever regulators start looking into things I worry:

• Sky are too dominant. Another company must be given sports games. Benefit to me? Another £15 a month
• Directory Enquiries should be opened up to more competition. Benefit to me? £2 to get a number.
• RDR: Commissions are not obvious. Benefit to me? Instead of paying 0.3% I now pay 0.6% for the same tracker.

talexuser

j0nathon2 wrote: »

Whenever regulators start looking into things I worry:

Another for your list. Some years ago a disabled person I know had a BT phone just for emergencies and paid ~£11 a quarter just for standing charge. Then BT brought in a new basic package at ~£14 a quarter. I wrote to the regulator on their behalf asking how he could allow a 22% increase (that's what it worked out to) in charge for this person in a time of ~2% inflation. I just got a bull**** letter back about added benefits (which were of no use to this particular person) and BT went ahead and raised the price. It seems to me that regulators are too close to their industries, and anyway a sign of complete failure of markets and competition due to virtual monopoly in the first place.

Milarky

What I'd ask for is considering making monthly interest an option (perhaps the default) on the many savings products where is it won't be at present. If you show customers the interest added each month any large change of rate is spotted earlier and if customers want to do something about it, they are alerted and somewhat motivated.

Also, receiving monthly interest means that you start or finish a tax year with no accrued interest unpaid - i.e. it takes out the lumps.

Gordon_the_Moron

Banning/limiting bonuses on accounts will make little practical difference except probably mean people like me that use them will have to switch more often.

Banks will simply offer 'clean' high variable rates instead of high rates with bonuses to draw people in, they will then reduce them later, the only difference being they probably won't last as long as they won't have to advertise a bonus length. Not sure what would be particularly productive about that for anybody.

michaels

VT82 wrote: »

I see the two markets as having the same issue. The average rates paid to all savers will be dictated only by what banks want to pay, whether that's with everyone getting a 'fair' rate, or with the market being split into those getting a lousy rate and those getting a good rate. Ditto the average cost of energy will be the amount needed to make the energy compaines a tidy profit, and won't be affected by whether it's everyone paying near enough the same, or with the current model of allowing the active switchers to get a better deal.

I think you are wrong it is not just about how the interest/charges are shared about but in fact also leads to a shift from consumers to suppliers: in fact if the govt steps in to reduce competition then on average all consumers will be worse off and all suppliers will make more profit - not surprising the govt is moving in this direction as after all it is the big companies that make the political contributions. Selling it as championing the consumer is a bit rich though.:(