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Inflation domination appears to be almost complete, judging by the latest data from the British Retail Consortium.
According to their figures, the cost of non-food goods (for example, clothing and footwear) in stores in our country fell last month at an annual rate of 0.6 percent, while food prices increased by 3 .4 percent (compared to 3.7 percent in March).
It suggests the official inflation rate (3.2 per cent in the year to March) could approach 2 per cent when the Office for National Statistics publishes April figures later this month.
It is therefore a shame that price inflation in the car insurance market has not yet been quelled, although the Association of British Insurers (ABI) would like the whole world and its dog to think otherwise.
In a press release issued six days ago, the insurance industry lobby group said car premiums increased by just one per cent in the first three months of this year.
Fight: The financial regulator’s insurance chief has described the extra cost to monthly customers of a “poor tax”.
Correct, but what you didn’t mention is that, compared to the same period last year, the average price paid for comprehensive car insurance was a whopping 33 per cent higher (£635 vs £478).
This is a tremendous increase, whichever way you slice the numbers. And of course, the young and elderly in particular are paying much higher annual premiums than £635 – and have experienced premium increases of more than 33 per cent.
Defending the association, its insurance CEO admitted that “car insurance costs put pressure on household finances.” (‘Stateing the obvious’, I hear you say).
He also referred to the work that the ABI has just begun to guarantee better treatment for insurance clients who pay monthly for coverage.
Currently, many who pay for their coverage this way (both home and auto) face interest rates of more than 20 percent. It can mean that a motorist with monthly cover pays an average of £300 more a year than someone who pays up front.
This price discrimination is justified by insurers because they actually lend their clients their annual premium monthly, which they repay in installments. But it’s an argument that few outside the insurance community accept.
The financial regulator’s insurance chief has described the extra cost to monthly customers of a “poor tax” as many households cannot afford to pay for cover any other way.
Consumer group Which one? has called for “harsh punishments” to be adopted against those companies that impose the most severe burdens. The ABI’s response has been to publish a list of “principles” that it would like companies to adhere to. These focus on offering installment customers greater price transparency and better value for money.
It then intends to report next year on how effective they have been in reducing the additional cost of paying monthly premiums. Quite a smokescreen, I think, to appease a regulator that the insurance industry has been circling for a long time (and continues to do so).
The losers continue to be the elderly, who are often least able to afford the skyrocketing cost of insurance coverage, while continuing to assume that their long-standing insurer will always look out for their best interests.
Nothing, dear readers, could be further from the truth.
If Worthing is worthy of the big banks, why aren’t other cities?
Best step forward: Jeff running the Worthing Half Marathon
Seven days ago, I spent a windy morning completing the Worthing Half Marathon.
At one point I thought they would fly me to the English Channel.
Afterwards, I walked around the West Sussex town.
Although its high street (like many across the country) has taken a hit, it was good to see that all the big banks still have a presence: Barclays, HSBC, Lloyds, NatWest and Santander.
The question arises: if everyone can justify a presence in this town, why has EVERYONE abandoned other places worthy of a major banking presence, for example places like Windsor in Berkshire and Harpenden in Hertfordshire?
Responses to jeff.prestridge@mailonsunday.co.uk.
Victory at last in the fight for the Philips trust fund
Finally, after a titanic battle, most of the victims of the Philips Trust Corporation scandal will get the financial justice they so richly deserve. Brilliant news.
Four days ago, three major building societies – Leeds, Newcastle and Nottingham – agreed to compensate clients who lost money as a result of the questionable actions of this despicable company (now in administration).
This “financial support” means that losses that customers suffered at the hands of Philips Trust will be compensated. There will also be financial support for those whose properties were transferred to trusts managed by the company.
The companies’ measure is generous given that their role in this scandal was one step away (they had no dealings with Philips Trust).
However, it is an admission that they were wrong to encourage their clients to purchase (unregulated) will and trust drafting services from a third party, Estate Planning Group (EPG), and receive a generous commission for doing so.
Most clients were older and trusted what their building society told them to do. Philips Trust entered the picture later, taking over management of the trusts created by EPG’s Family Trust Corporation. It then went into administration in April 2022, leaving the funds in tatters.
In recent weeks it became clear that all three societies had to act. They had faced uncomfortable questions at their annual general meetings, while earlier in the day a motion was tabled in Parliament calling for societies to cover victims’ losses.
Coverage of the issue in this column and in numerous local newspapers also increased pressure on them, while the Philips Trust Action Group was relentless in its pursuit of justice.
By agreeing to cover clients’ losses, the three companies have ensured that their good reputation remains intact.
The only shame about the agreement is that it does not extend to the smaller companies caught up in this scandal. I trust that they will now follow in the footsteps of their most important rivals.
Banks must remove blocking of Nationwide operations centers
Thank you for your kind comments on my article last week about the success of the banking center in Cambuslang, South Lanarkshire.
Among those making comments was Derek French, the former NatWest banker who was largely at the forefront of the banking center revolution. Without his passionate campaigning, there would be no center in Cambuslang or 46 other towns spread across the country.
Although Derek is glad that these community banks are now coming to the rescue of many cities where the last bank branch has closed, he does not believe that the expansion of their numbers will be as rapid as some say.
Banking trade association UK Finance estimates that a commitment to fund 225 centers (including those already in operation) will have been made by the end of the year. However, Derek says this would only be possible if between now and December 31 there were a “wave” of branch closures in cities large enough to host a centre, and where Nationwide has no presence.
Under current rules, banks will not open a center in a town where Nationwide has a branch, even though the building society does not offer high street banking, which is essential for many local retailers.
Derek says the creation of 225 centers is only possible if the banks remove this “lock-in” from Nationwide. I agree.
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