Virgin reduces rate on esaver account!

talexuser

ColdIron wrote: »

. Loyalty to existing savers seems to have evaporated

You've only just noticed? Business practice lost all sense of morality as soon as it became the norm to offer much better deals to new customers than existing long standing customers, or to offer much better deals to customers who threaten to leave compared to those who don't and stay.

Basically you don't care about existing customers as long as there are enough stupid enough not to move, and can use profits from them to entice new ones who may be more savvy but who end up in a merry-go-round of changing companies every year. And hope that some of the merry-go-round give up or just forget after a year!

Old_Slaphead

Bantex wrote: »

Nasty savers, they caused all the problems and deserve to be punished.

I know that was tongue in cheek but savers should be lauded for creating jobs for those nice bankers. The money they save is still used to spend in the economy it's just being done by another consumer and there's an added layer of admin to help raise tax revenues.

Old_Slaphead

opinions4u wrote: »

With a woefully inadequate minimum personal contribution. To ensure we carry on spending.

I wouldn't bet on that.

I've been told that there's cross party agreement that personal contributions will not stop at the current plan of 5% and is likely to eventually follow the Australian pension saving model.This will be tied into ongoing erosion of state pension benefits.

ColdIron

talexuser wrote: »

You've only just noticed?

The Issue 1 e-Saver for existing customers was about 0.5% above equivalent accounts for new savers even after the rate reductions so I do feel Virgin were rewarding loyalty for a while

Business practice lost all sense of morality as soon as it became the norm to offer much better deals to new customers than existing long standing customers

Not really the norm any more though is it Enticements to new savers and the desire to retain existing ones have both vanished

evenasus

nilrem wrote: »

It's great if a borrower but for savers it just gets worse.

(Stands by the door ready to make a quick exit as all those who are just borrowers rush to condemn me for daring to mention the plight of savers!)

I received an email from Virgin yesterday telling me about the drop.

I'm fed up of hearing about the plight of borrowers. They've had low interest rates for over five years now.
Roll on interest rates rising.

talexuser

ColdIron wrote: »

Not really the norm any more though is it

Not for savings, no, because of market manipulation by cheap money from the government, but more generally for utilities, insurance, general large corporation practices.

I think we are stuck with these rates for years yet. The quick backtrack over "forward guidance" reinforces my view. Unless bad inflation follows a growth spurt and rate rises become a panic measure as the lesser of the then evils.

nilrem_2

talexuser wrote: »

Basically you don't care about existing customers as long as there are enough stupid enough not to move,

Problem now is that there are very few places where savers can move their cash too and even if one moves the account one moves to often plummets not long after.

Only real option is fixed rate but even these accounts are paying little unless one ties up for 5 years and above!

Milarky

Old_Slaphead wrote: »

I wouldn't bet on that.

I've been told that there's cross party agreement that personal contributions will not stop at the current plan of 5% and is likely to eventually follow the Australian pension saving model.This will be tied into ongoing erosion of state pension benefits.

Would that be the aspect of he Australian savings model that cuts the link to annuitization? No one (except an advisor) loves annuities - they are graveyards for savings at current levels since the annuity rate dictates the income - making the value of contributions (uncertain growth followed by unknowable interest rate) impossible to assess.

GreenBitterfly

The interest rate has been reduced on the easy access ISAs too, well created a new issue with a lower interest rate. It wouldn't surprise me if they reduced the interest rates on old issues of ISAs, already had mine reduced from 2.80% to 2%.

Thrugelmir

nilrem wrote: »

It's great if a borrower but for savers it just gets worse.

(Stands by the door ready to make a quick exit as all those who are just borrowers rush to condemn me for daring to mention the plight of savers!)

The UK's debt pile is so large. That repayment is unlikely. So inflating away the debt is seen as the most appropriate course of action.

Borrowers may well yet get bitten far more badly.