Nationwide's 'Fairer Share' £100 payment for eligible members

zagfles

wiseonesomeofthetime said:

metrobus said:

Exodi , I agree their savings rates have been nothing to write home about, but the new fairer 2 year bond at 4.75% is OK and it might persuade some of the sour grape mob on here to become active savers and then more likely to be eligible for the payout should there be one next year. Then I am sure they will stop their moaning.

Only "OK" is probably a fair expression for that rate tbh.

There are almost 20 two-year bonds with other providers with a greater rate. Top this morning is 4.96%

I've just opened one at 5.07% nominal (AER 4.95%, still better than NW). Required zero "loyalty".

zagfles

wmb194 said:

zagfles said:

wmb194 said:

Albermarle said:

As I said in one of the other threads, current accounts are not a building society thing. Out of the 40+ UK building societies Nationwide is the only one to offer a current account (except Cumberland who only offer it in their area).

They are the only building society to offer a current account, partly because other large building societies that did offer current accounts ( Abbey National & Halifax to name two I am aware of ) demutualised and became banks.

Also Nationwide are approx. 5 times bigger than their largest rival, in terms of assets, members and branches, and of the Top 10 building societies they are bigger than all the other nine put together. So a somewhat special case in the world of UK building societies and in my local town, the only current account provider with a branch still offering banking services to local people.

There were others, though. I can think of Coventry and N&P/YBS giving up on current accounts. You might have thought these two would have been able to give it a go.

But they were never a core building society product. Just like mobile phone contracts were never a core supermarket product. Are you a "loyal customer" if you make use of the company's core products regularly for decades? Apparently not in the case of Nationwide.

I don't disagree but they wanted them to be a core product and clearly so does Nationwide. 

I see this 'fairer' payout as a continuation of its recent marketing drive to obtain more current account customers who then open savings accounts, buy insurance, buy investment products, go overdrawn, take out mortgages and so on. 

If you look at it through this lens it all makes sense; ignore all of the flowery stuff around 'fairer,' 'mutual,' 'no shareholders' and the rest. For years - and also for many other building societies as well - that's just been a marketing USP. It is a profit seeking business seeking to perpetuate itself.

And all that's fine - like current account switch bonuses, nobody whinges about them because that's what it says on the tin. It's the pretence of being "fair", of rewarding loyalty etc that annoy people.

If it thinks that gaining more current account customers is the way to do this then that's what it will do and, unless there's a massive backlash that hits the bottom line, it won't care about appearing hypocritical to some people.

I think they will see one. People who have money languishing in accounts paying rubbish rates of interest may get a kick up the rear to move it somewhere better or just to move it out anyway. Others may just move money out of current accounts they don't use much, I've just emptied mine. Also I've had a savings account I don't use with 1p in it, I've just closed it, and it asked whether I want the proceeds transferred to another account or a cheque sent in the post. I opted for the latter. Looking forwards to getting my cheque for 1p, I think I'll frame it Yes very petty but it was after their online banking annoyed me further by not allowing a transfer under £1, well if they make it hard for me to get my 1p they can pay the postage to send me a cheque!

zagfles

Albermarle said:

Ciprico said:

They want to retain active current account holders...simples...

People will always shop around for best mortgage/saving accts and even open up ghost current account to access best savings accounts.

The holy grail is getting people to really move their current accounts and retaining the same.

So that is what they want to encourage..

Stop moaning ! 

This would appear to be the main motivation, a way of trying to discourage people from switching out of their current account over the next 12 months. 

Why would that discourage them? You can get £200 by switching to NatWest, RBS or HSBC. I imagine it would enourage those with a current account who didn't get the bonus.

zagfles

Exodi said:

km1500 said:

for me the problem with the way they have done it is that there are not just a few members 'on the edge' who have missed out - there are very very large number of members who have missed out and that is fundamentally unfair

A lot of people have waded in with the view that the current terms are not fair, but very few have offered alternatives.

Where would you set the goalposts? Half the bonus, remove the current account requirement but increase the savings/mortgage balance needed to double the amount of members eligible? What about the objections from people that are £1 short of the savings requirement?

The vast majority of their profits come from "net interest income" ie interest they charge minus interest they pay out. So if, as their press release implies, this is a profit share, then that share should surely be in proportion to the members' contribution towards their profits. So maybe based on loan/mortgage balance, and savings/current account balance. Perhaps tiered in some way, or something like £1 for every £100 of average balance over a period (whether savings, mortgage, current account, credit card etc).

That would reward members in proportion to their contributions towards their profits.

km1500

or maybe just increase their savings rates  a tad and reduce their mortgage rates a tad ?

boingy

Albermarle said:

Ciprico said:

They want to retain active current account holders...simples...

People will always shop around for best mortgage/saving accts and even open up ghost current account to access best savings accounts.

The holy grail is getting people to really move their current accounts and retaining the same.

So that is what they want to encourage..

Stop moaning ! 

This would appear to be the main motivation, a way of trying to discourage people from switching out of their current account over the next 12 months. 

The best way to do that is to announce this sort of bonus a year in advance so people don't switch.

Nebulous2

boingy said:

Albermarle said:

Ciprico said:

They want to retain active current account holders...simples...

People will always shop around for best mortgage/saving accts and even open up ghost current account to access best savings accounts.

The holy grail is getting people to really move their current accounts and retaining the same.

So that is what they want to encourage..

Stop moaning ! 

This would appear to be the main motivation, a way of trying to discourage people from switching out of their current account over the next 12 months. 

The best way to do that is to announce this sort of bonus a year in advance so people don't switch.

Which is sort of what they have done. Said they hope to continue it next year. 

Yet what we are seeing here is people threatening to leave. 

If you were uncommitted to a bank, would you:- 

a) switch to Nationwide, guess the rules you need to follow, wait a year, or take a chance on a shorter period, for a possible £100. 

b) switch to bank B get £175 - £200, with freedom to leave and try again, if it doesn't work for you? 

Of course being MSE some people here will do both, but the general public don't have an appetite for that. I've tried at work, tired people, juggling lots of responsibilities, complaining about being hard-up. "I just got £175 for switching my bank account, have you tried that?"  "Oh, I couldn't be bothered with all that." 

Of course I don't know their circumstances. If they have previous credit issues, finding someone to take them could be fraught with difficulties, and it might be safer not to rock the boat. 

Exodi

zagfles said:

Exodi said:

km1500 said:

for me the problem with the way they have done it is that there are not just a few members 'on the edge' who have missed out - there are very very large number of members who have missed out and that is fundamentally unfair

A lot of people have waded in with the view that the current terms are not fair, but very few have offered alternatives.

Where would you set the goalposts? Half the bonus, remove the current account requirement but increase the savings/mortgage balance needed to double the amount of members eligible? What about the objections from people that are £1 short of the savings requirement?

The vast majority of their profits come from "net interest income" ie interest they charge minus interest they pay out. So if, as their press release implies, this is a profit share, then that share should surely be in proportion to the members' contribution towards their profits. So maybe based on loan/mortgage balance, and savings/current account balance. Perhaps tiered in some way, or something like £1 for every £100 of average balance over a period (whether savings, mortgage, current account, credit card etc).

That would reward members in proportion to their contributions towards their profits.

I'm not against this, it seems logical. I expect mortgage holders would see the majority of the benefit.

Nonetheless, I'm not sure it solves the problem for the people complaining on this thread - just looking at this page (sorry but I'll include you in this), some have already admitted they hold very low balances on Nationwide:

boingy said:

My current account and normal savings account are pretty much empty
...
My Nationwide mortgage was paid off a few years ago.
...
I have an active regular saver account which has over £1000 in it. 

zagfles said:
Others may just move money out of current accounts they don't use much, I've just emptied mine.
...
Also I've had a savings account I don't use with 1p in it, I've just closed it, and it asked whether I want the proceeds transferred to another account or a cheque sent in the post. I opted for the latter.

I have tried so hard to find common ground with those complaining on this thread, and accept it is unfair to those that don't hold current accounts (but large balances with Nationwide otherwise). But I'm having trouble sympathizing with people, who by their own admission, barely use Nationwide but feel entitled to a share of the profits.

I'm sorry, I hold an (empty) current account with First Direct, and a regular saver with a couple of grand in it (a current account is a condition of their 7% regular saver, as I'm sure many are aware). I just can't imagine I'd be foaming at the mouth if First Direct announced some sort of loyalty reward and I didn't get it.

km1500 said:

or maybe just increase their savings rates  a tad and reduce their mortgage rates a tad ?

Only ~15% of their profits are allocated towards this payout. Most of it has been put into lowering their rates (this was posted earlier).

zagfles said:

wiseonesomeofthetime said:

metrobus said:

Exodi , I agree their savings rates have been nothing to write home about, but the new fairer 2 year bond at 4.75% is OK and it might persuade some of the sour grape mob on here to become active savers and then more likely to be eligible for the payout should there be one next year. Then I am sure they will stop their moaning.

Only "OK" is probably a fair expression for that rate tbh.

There are almost 20 two-year bonds with other providers with a greater rate. Top this morning is 4.96%

I've just opened one at 5.07% nominal (AER 4.95%, still better than NW). Required zero "loyalty".

Its apples and oranges - Nationwide comes with infrastructure that savers may prefer (such as physical branches, ability to transact in multiple ways, good customer service, etc). It's not fair to compare it to online outfits that have far lower overheads and are typically able to offer the highest rates of interest. I'd be interested in how this product compares to high street banks.

Albermarle

Only ~15% of their profits are allocated towards this payout. Most of it has been put into lowering their rates (this was posted earlier).

Presume you meant increasing their rates ?

 I'd be interested in how this product compares to other high street banks.

Two year fix rates

Lloyds - 4.25%; NatWest 4.39%; HSBC 4.1% ; Co-op 4.12 %; Santander 3.5% to 3.75%

ForumUser7

Albermarle said:

Only ~15% of their profits are allocated towards this payout. Most of it has been put into lowering their rates (this was posted earlier).

Presume you meant increasing their rates ?

 I'd be interested in how this product compares to other high street banks.

Two year fix rates

Lloyds - 4.25%; NatWest 4.39%; HSBC 4.1% ; Co-op 4.12 %; Santander 3.5% to 3.75%

I think OP means lowering mortgage rates

Edit: For example: Nationwide cuts selected higher LTV mortgages Nationwide Cuts Mortgage Rates Nationwide further reduces mortgage rates The Mortgage Works further reduces switcher rates Nationwide further reduces mortgage rates for new and existing borrowers Nationwide further reduces mortgage rates All this year