A round-up of the main news stories this week.
Compulsory Charges for Current Accounts?
Tensions between the public and major banks are likely to be raised a notch after a senior figure at the Financial Services Authority suggested that charges could become compulsory for current accounts. The new chairman of Barclays, Sir David Walker, recently voiced what appears to have been a collective opinion from the major banks: that providing free current accounts left banks no choice but to pursue revenue streams in more stealthy ways. There is likely to be significant opposition to an enforced fee for these accounts, however; not only from the public, but also from challenger banks, who would be able to provide serious competition were they able to keep providing accounts free of charge.
Consumers Desperate for Alternatives
Disillusioned consumers, for their part, are desperate for alternatives for their major finance products. A recent poll suggested that the majority would prefer to have their accounts run by trusted retail brands such as John Lewis or Waitrose. Most believed that their bank did not offer good value and were unsatisfied with customer service.
Savers Ready to Ditch High-Street for Better Savings
And hundreds of thousands of savers are also ready to leave behind traditional high-street savings accounts in favour of risky investment products that are promising over twice that rate. Retail bonds and crowd-funding are two increasingly popular options that are tempting savers with the promise of much larger returns. Savers have been warned, however, that such products do not fall under the protection offered by the Financial Services Compensation Scheme.
Keep Calm and Carry On… Saving
Consumers are being told not to be alarmed as banks and building societies promote details of the Financial Services Compensation Scheme in their branches. From 31st August, all financial institutions that are authorised by the Financial Services Authority must display information about the scheme to reassure customers that their savings are safe. (See our full guide to Secure Savings and Compensation). The scheme has come under attack in the past for spending millions on ineffective television advertising campaigns. But by spreading the message more visibly, through bank branches and websites, it is hoped that consumers will become more informed about the protection that is available to them for their deposits.
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