MSE News: Current account market faces full competition inquiry

giblet10 · 18 July 2014 at 4:20PM

grumbler wrote: »

This made me check the deck of my semi-abandoned cards. Yes, all gold/platinum ones seem to have been replaced with black and other colours, but I haven't even noticed this.

Yep, very sad sign of the times..society moves away from being hierarchical so now I don't know who to be friends with - everyone has mixed colour cards now!

101problems · 18 July 2014 at 4:25PM

i think the point has been missed with regards to free banking.
I agree with the statement as in the states and other countries in europe you pay for just about everything with your bank from transfers to cashing cheques, In the UK these costs are absorbed by the banks which is why they have such high fees for indescretions basically its if you want cheaper fees we are going to be charging you what it costs everytime, as someone who runs my account well and avoids fees and makes money out the bank I say we have a cracking deal!!
have a read of this, they charge you for using there app!!
http://www.usatoday.com/story/money/personalfinance/2013/07/07/bank-fees-mobile-services/2480541/

Pincher · 18 July 2014 at 4:29PM

giblet10 wrote: »

Personally, the market that is missed in this country is mid-wealth, in my experience. Take me, household income about £90k a year - no bank has a product targeted to me - I'm too poor for the likes of HSBC and Barclays premium offerings but also consider myself wanting a bit better than a basic first direct account.

HSBC Premier £50k total holding

Barclays Premier £100k total holding or £75k annual income.

Or do you mean Private banking?

I think it's like a lap dancing joint. Premier is where they fleece you in view of everyone. Private banking is when they shut the curtains, and really make you pay through the nose, for very little service.

~Brock~ · 18 July 2014 at 4:30PM

I've been with my bank for 27 years and have built up a good relationship with them. Their service to me over the years has been excellent, in my opinion.

Why the constant regulatory obsession with 'shopping around'? I don't want to move because I am happy where I am.

I suspect I belong to a silent majority of people who are happy where they are, do not give their banks' headaches with financial mismanagement problems and in return do not have cause for grief or complaint. They can spend fortunes of (ultimately) tax payers money on these reviews but will it really change anything?

Also, people who are constantly whinging about their bank should often, when pointing the finger of blame, look where their other fingers are pointing.

vm2pensioner · 18 July 2014 at 4:48PM

So does the government want to force people to change, just to create artificial competition?

A few years back, government encouraged Lloyds to take the poisoned chalice of Halifax / BOS without due dilligence - and we all know what happened to Lloyds shares in the aftermath and the effect on people's pension funds - to create a bigger stronger bank. Then, surprise, surprise, government - prompted by EU - said, oh, bank is too big, so sell off TSB cheap! More losses.

If the recent meddling with domestic fuel tariffs, where many poorer people / low users have ended up paying more as a result, is anything to go by, government intervention will be a disaster.

Why meddle?

grumbler · 18 July 2014 at 4:56PM

Because they have to do something to justify their existence?
Brussels springs to mind with their endless anti-market directives that do distort the competition.

vm2pensioner · 18 July 2014 at 4:57PM

Precisely.

GingerFurball_2 · 18 July 2014 at 5:29PM

They're right, there's not q lot of competition in the market. But I don't knkw what exactly this watchdog is going to do about it.

At the end of the day, you need 3 main functions from your bank account:

1. The ability to receive credits
2. A debit card to make purchases and cash withdrawls
3. The ability to make payments from your account, whether by FPO or DD.

Literally every bank account offers this and every major UK bank offers this service free of charge. There's really not a lot a bank can do in order to differentiate themselves from everyone else in the market.

The only way to really offer competition would be for banks to start charging for their services. But that would make consumers worse off and would be wildly unpopular.

Caddyman · 18 July 2014 at 6:03PM

I'm afraid I'm another one who doesn't have an issue with the UK banking system. Then again, I haven't been overdrawn for almost 20 years. I have accounts with both Lloyds and Nationwide and I'm very happy with their services.

I certainly don't want to see the sorts of charges levied that other banks charge around the world:

http://www.moneysavingexpert.com/news/banking/2012/12/moving-to-australia-is-banking-better-down-under

Pincher · 18 July 2014 at 6:12PM

You can always innovate. Now that we have computers to keep the accounts updated, instead of shutting the bank at 3:30pm to get on with the paper work, sky's the limit.

For example, ALL your money should earn interest, but it's based on a more complicated formula. For example, your money is kept in a deposit account. At the end of each day, the ins and outs on your current account creates a surplus or deficit. The surplus is transferred into the deposit account, but deficit is deducted from the deposit account.

You can designate an amount, say £20k, for mortgage offset, so you don't get any deposit interest (thus no income tax).

The rest of the money will get a variable interest rate, depending on the lowest level it gets to in a set period. So if the deposit account is always above £5,000 in 2014, you get 3%. If the account dips below £1000, you get 0.1%.

So, it makes sense to keep your money in one big pot, instead of constantly switching to chase the best rate: which is NOT FUN. If there are people who LIKE checking for a better rate constantly, seek help.

MSE News: Current account market faces full competition inquiry

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