This is my last Money comment. After almost four years of musing, sermonising and occasionally ranting and raving, I am moving on to pastures new.
It has been an extraordinary time to be writing about personal finance, given the pace of change that has, thankfully, been mostly for the better. There has been the shake-up of the investment world — the retail distribution review’s yawnsome title belied its radical intent. By sweeping away the backhanded bribes (commission) and forcing intermediaries to charge fees, it has made the cost of financial advice more transparent.
However, there is more to be done. These payments have been banned only on new sales, so if you bought unit trusts or pensions through an adviser before December 31, 2012, the person who sold them to you is probably still receiving an annual commission, even if the advice was rotten. Good advisers should have already offered to switch your funds to new “share classes” that do not pay commission. If yours hasn’t, you should ask them why.
The disclosure of fees, especially to potential clients, also needs to be improved. Advisers, if you have nothing to hide, tell consumers what they want to know and publish indicative charges online.
There has also been the mortgage market review, which has made lives more difficult by making home loans harder to obtain, slowing down the offer process and forcing borrowers to account for all their spending — even how much they shelled out on haircuts and holidays.
Although it has been a big irritant, there is a good deal of sense in the new rules, which are designed to ensure that the rash borrowing and lending that sparked the financial crisis won’t happen again — as long as banks and building societies enact them sensibly.
The third, and perhaps most seismic, change has been the pensions revolution. We are still waiting to see how this one pans out, but by granting those aged 55 and over the freedom to spend their retirement funds as they wish, George Osborne and the former minister for state pensions, Steve Webb, have achieved the impossible — making people engage with their pensions. As a subject it hasn’t quite achieved sexy status, but at least it now has a certain allure.
However, for all the steps forward there has been much that hasn’t improved or has become worse. If you will indulge me one last time I want to hand out a number of awards to those whose service and behaviour have disappointed or delighted over the past four years.
Basil Fawlty award for customer service
Like the character from Fawlty Towers, some companies have excelled at routinely rubbing customers up the wrong way, and in a packed field of contenders the award goes jointly to Npower and Scottish Power. This week Citizens Advice named and shamed Scottish Power as the most complained about energy company, and last month it was voted the worst company in Britain in a survey byWhich?, the consumer group.
Times Money has devoted as many column inches to the appalling customer service of Npower, thanks to the dogged reporting of my colleague Mark Atherton. Poor billing dominated the complaints we received; both companies blamed their IT systems, although they claim they have been working hard to make significant improvements. Customers, it seems, have yet to profit from the results.
Mr Bean pratfall award
I almost feel sorry for HMRC — almost. When I started writing this column the Inland Revenue was in disgrace — it had just shamefully admitted that it had been unable to send out tax reminders because it had run out of paper. Screw-ups were the order of the day and since then things have improved markedly. The online self-assessment system, in particular, now seems to run smoothly.
That improving trend, however, stalled when HMRC introduced the marriage tax allowance this year and we were flooded with complaints from readers who had been foiled by the online application system. As we revealed a few weeks ago (“Try snail mail for the marriage tax break”, September 19), you might have more success by claiming the tax break by post or phone — if you can get through. Frustrated callers have tweeted HMRC more than 11,500 times over the past year to complain about long waits for calls to be answered, Citizens Advice reported last month. Those who took to Twitter had spent an average of 47 minutes on hold.
Gordon Brown award for tinkering
The Tories promised a different approach when they came to power; that tax simplification would be a key priority. Yet George Osborne, the award’s recipient, has been, while in the chancellor’s chair, as guilty as Brown of introducing a “spaghetti bowl of reliefs, exemptions and allowances” to fulfil short-term political motives, and has left the tax system more complex.
Take the plan to increase the inheritance-tax threshold. By failing to make it universal — it goes only to families with children — and paying for it by raiding the pension contributions of higher earners, it muddies the tax system further. The tax attack on buy to let is so complex that even tax advisers can sound baffled.
Walt Disney award for common sense
One of Disney’s most famous quotes is: “Do what you do so well that they want to see it again and bring their friends.” What has worked for the maker of Frozen and Bambi has also worked wonders for First Direct, a bank that is universally praised. Pretty amazing, given that it doesn’t pay any interest on its current account.
Other banks, most notably Santander and the challengers such as Metro Bank, have recognised and attempted to emulate the secret of the bank’s success, which is quite simple: keep customers happy. At last, service for bank customers has started to improve; it’s just a shame that the same can’t be said about interest rates.
Of course, without the input we get from our readers, Times Money wouldn’t have the ammunition we need to call companies to account for their service, rates and returns, and to praise those that deserve it.
I would like to thank all of our readers and encourage you to continue to share your experiences with my successor. We could not do it without you.