Coventry BS reducing interest rates

First_past_the_post

So it seems the complaint is:

• I was getting a relatively high rate in the first place
• I'm still getting a relatively high rate now
• They've been up-front and told me personally about the rate reduction

I know we like to criticise financial institutions on these boards - often with good reason - but this seems a little mis-placed here.

Bernard your summarising of my 'complaint' wholly misses the point that i stated. The reduction in interest is still greater than the BOE rate reduction regardless of whether you believe 'Im still getting a relatively high rate now'. In regard to CBS being up front and told me personally about the rate reduction, as stated CBS did not disclose the BOE cut of 0.25% nor were they 'up front' in explaing why they reduced interest rates more then this.

Bernard_Coleslaw

First_past_the_post wrote: »

Bernard your summarising of my 'complaint' wholly misses the point that i stated. The reduction in interest is still greater than the BOE rate reduction

So? Where is it written that your savings rate will always move in the same way as BoE base rate? There are dozens of institutions who have made rate cuts over the last few year, independently of any base rate movement.

regardless of whether you believe 'Im still getting a relatively high rate now'.

I don't have to believe it. I can see you're getting a rate that's a good 0.50% better than new savers can get on the market today. No-one likes to see their rate go down, but you're still doing a lot better than most other variable rate ISA savers today. I'd take that in a heartbeat.

In regard to CBS being up front and told me personally about the rate reduction, as stated CBS did not disclose the BOE cut of 0.25% nor were they 'up front' in explaing why they reduced interest rates more then this.

So what did they say by way of explanation when you asked them about it?

First_past_the_post

First_past_the_post wrote: »

So? Where is it written that your savings rate will always move in the same way as BoE base rate? There are dozens of institutions who have made rate cuts over the last few year, independently of any base rate movement

.

I agree institutions make base rate cuts but at the risk of repeating myself CBS expressly stated that this reduction is due to the BOE base rate cut.

I don't have to believe it. I can see you're getting a rate that's a good 0.50% better than new savers can get on the market today. No-one likes to see their rate go down, but you're still doing a lot better than most other variable rate ISA savers today. I'd take that in a heartbeat.

As a customer of CBS for 30 years I am not going to apologise if the rate I get is better than others may get now. And I'd take in a heartbeat the mortgage interest rates they now offer compared to what interest rates used to be.

So what did they say by way of explanation when you asked them about it?

Really? They will probaby save that for the AGM.

Bernard_Coleslaw

First_past_the_post wrote: »

First_past_the_post wrote: »

.

I agree institutions make base rate cuts but at the risk of repeating myself CBS expressly stated that this reduction is due to the BOE base rate cut.

Well, in the letter I got from them, it actually says:


"I'm writing to let you know that following the recent decrease in the Bank of England Base Rate on 4 August 2016, we've reviewed the interest rate paid on our savings accounts."


Leaving aside the fact that they're not even implying causality, it seems reasonable that given a reduction in their income from borrowers, that would be a good time to review what they can pay to savers.

I still can't see where the 'more than 0.25%' argument comes in though. Perhaps they've had a look at the savers as a whole. Maybe some savers on lower rates will see less of a reduction. Maybe some savers on higher rates will see more of a reduction.


Mind you, I suppose it would be easy to find out by asking them...

Really? They will probaby save that for the AGM.

Or you could go onto an internet forum and accuse them of ripping off their customers?

First_past_the_post

Leaving aside the fact that they're not even implying causality

It would seem to me that there is a strong case for causality if following a meeting to dicuss BOE base cut they then reduce savings rates. Whats the alternative, they were going to do it anyway?

I still can't see where the 'more than 0.25%' argument comes in though. Perhaps they've had a look at the savers as a whole. Maybe some savers on lower rates will see less of a reduction. Maybe some savers on higher rates will see more of a reduction.

Poster Retiree provided a table of the new rates. In that you will see variable rate mortgages reduce by 0.25% from 1st Sep.
In the same table you will that all non ISA products, all ISA products, all AVC accounts and telephone money manager savings have 1 thing in common, they are all having interest rate reductions. The majority of which are at least 0.25%.

Or you could go onto an internet forum and accuse them of ripping off their customers?

Ripping of their customers? Entirely your words not mine.

Bernard_Coleslaw

First_past_the_post wrote: »

It would seem to me that there is a strong case for causality if following a meeting to dicuss BOE base cut they then reduce savings rates. Whats the alternative, they were going to do it anyway?

Not quite. Although there were something like one thousand rate cuts carried out by savings providers in 2016 before the Bank of England reduced base rate - something you seem unconcerned about ("I agree institutions make base rate cuts") - so who knows?


What they're not saying is that they're going automatically to follow base rate reductions by the same amount.

Poster Retiree provided a table of the new rates. In that you will see variable rate mortgages reduce by 0.25% from 1st Sep.
In the same table you will that all non ISA products, all ISA products, all AVC accounts and telephone money manager savings have 1 thing in common, they are all having interest rate reductions. The majority of which are at least 0.25%.

I also noticed on that table the not-inconsiderable list of accounts that are not seeing a reduction at all.


Having said that, the table doesn't tell us too much about their overall approach to their savers. For all we know, there could be hundreds of thousands of individual customer accounts seeing a lower fall - or no fall at all - as we don't know how many customers are in each pot. Simply counting products doesn't tell us anything. Of course, we could ask the building society, perhaps, but that's apparently just crazy talk.

Ripping of their customers? Entirely your words not mine.

Actually your words were "Tidy margin for CBS at the expense of the customer? " Potato, potahto.


I don't really think there is much point in the two of us going back and forth over this. We're probably boring any other remaining thread readers to tears! And we clearly have differing opinions:

• You believe that there can be no justification or conceivable reason for any savings rate cut that is in excess of bank base rate movements, regardless of whether the rate you end up with is fair nor not.
• I accept that savings providers are pretty much free to do what they want with rates in an open market. They're businesses, after all. I review my rate and if I think it's still fair, I just get on with things. If I don't think it's fair, I move my cash.

And this, perhaps, is one of the reasons I took a break from posting here over the years. I was getting increasingly frustrated at the approach - partly encouraged by the site, in fairness - that all financial institutions are essentially on the make.


This builds a sort of culture where we automatically go into attack mode, rather than taking a clear-headed and emotion-free look at our finances and working out the best option for ourselves when things change. It irritates me when the first reaction of someone is to go: "Company X is clearly lining their pockets" instead of "Right, how does this affect me and what should I do?"


I hold no particular brief for the financial services industry, members of whom have been guilty of some of the most flagrant abuses over the years. And when they genuinely mess up, I complain. But the constant accusatory and angry tone from some posters on this site is neither constructive nor healthy.