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Money Talk: Memories are made of this

Steve Lodge
Sunday 22 February 1998 00:02 GMT
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YOU MAY or may not care that this is the last of more than a hundred "Money Talk" columns I have written for this paper. But without making exaggerated claims about the quality of my advice and recommendations, it seems safe to say that over the past couple of years readers should have made and saved themselves worthwhile sums of money as financial consumers.

I am reasonably confident in this prediction because the single strongest trend in personal finance during this period has been, and still is, price and cost competition.

Notwithstanding other influences, such as what interest rates have been doing, or which way stock markets have been going, this period has seen wave after wave of improved deals on a wide range of financial products.

Many mortgages and PEPs are now sold with such heavy discounting that only in the very long term do companies stand to make any money at all. You can now be paid, literally, to use a credit card.

With many types of insurance it is a brave company that sends out a renewal notice with a higher premium: policy-holders do not have to look far for a cheaper deal. Even the banks seem to have shelved threats to reimpose charges on mainstream current accounts.

New players like the supermarkets and Richard Branson's Virgin, and new ways of selling ("direct" in particular), have been catalysts for much of this competition. And the fact that we are still seeing new entrants - British Gas has just started selling home insurance, for example - means that this trend is highly unlikely to have run its course.

This intense competition has also overridden potentially anti-consumerist spectres. The former building societies that handed out free shares to their members have not become as bad as the old banks overnight. Indeed it is that arch converter the Halifax, not a building society, that so far this year has launched a top-paying telephone savings deal, announced a move to seven-day branch opening, and disposed of that notorious rip- off, mortgage indemnity insurance, for many of its borrowers. It is the societies that now need to reassert their worth - or give up the game.

It should go without saying that to get the most out of this cost competition, financial consumers will have to be prepared to shift their custom and loyalties. Whatever the Bransons or building societies may like us to believe, no one financial organisation has, or will keep, a monopoly on the best deals.

Meanwhile, that's all from me. Thanks for reading.

q The Independent on Sunday has a free 26-page guide to Direct Pensions, sponsored by Eagle Star. Call 0800 776666 for a copy or cut out the coupon on page 17.

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