Several bank agents have told me that the Link ATM network will announce 15 locations where new banking centers will be opening on Wednesday. Hurrah!
Operations centres are the closest thing to a community bank we have in this country, allowing customers of all the big brands to do basic banking under one roof and (if they’re lucky) have access to a representative from their bank one day a week. Operations centres are replacing stand-alone banks, and Lloyds has announced 55 more closures next year.
Although new centres are becoming almost a regular occurrence (148 have been recommended so far and 81 have been opened), these latest 15 represent a big step forward. Why? Because the banks that fund the centres (through an organisation called Cash Access UK) have finally agreed to change the rules governing where they can be located.
Currently, a center can only be set up in a city that has lost its last bank. Even then, it can be ruled out because banks don’t think the city is big enough to accommodate one.
They were also discarded in locations where Nationwide still had a branch.
Lonely Voices: Sparks sang This Town Ain’t Big Enough For Both Of Us
Although it is a building society, not a bank (and does not offer banking services to businesses), the collective view of the banks was that building a centre of operations in a place where a Nationwide still stood proud could not be justified. As the pop band Sparks sang in 1974: “This town ain’t big enough for both of us.”
But thanks to a combination of pressure from the new administration and long-time community bank activists like Derek French, the banks have come to their senses.
Most of the 15 to be announced this week are in areas where Nationwide has a branch. Harpenden in Hertfordshire (French’s backyard) and Whitley Bay in Tyne and Wear are among the towns that will benefit. It is a move the banks should congratulate themselves for having agreed to.
This announcement will be supported by a new requirement imposed on a bank announcing the closure of the last bank in a city where Link recommends a center.
The bank will not be able to close its doors until the centre is up and running, meaning there will be continuity in banking services. The centres have handled more than a million customer transactions to date, so they are starting to be set up on our high streets, which, as consultancy PwC said last week, are under pressure never seen before. Banks, pharmacies and pubs are dropping like flies.
The next step is to improve the breadth of service offered by the hubs, even if it involves small changes such as installing printers so that customers can obtain duplicates of their bank statements.
Last week, City minister Tulip Siddiq hammered the banks and Cash Access UK on the need for better services at a roundtable on “banking hubs”. Hopefully the banks will respond positively. Siddiq wants 230 hubs up and running by the end of next year and 350 by the end of the current Parliament.
The 350 must be fit for purpose.
Energy companies are asked to cut bills
The scrapping of the Winter Fuel Payment (WFP), passed by the House of Commons last week, is cruel and indefensible.
Sadly, it now appears that despite all the campaigning by the likes of Age UK and Baroness Ros Altmann (and plenty of coverage on the issue in both the Daily Mail and The Mail on Sunday), Chancellor of the Exchequer Rachel Reeves has managed to get her way.
To all those readers who have contacted me through WFP, a big thank you for your lovely emails and letters – a mix of anger, passion and occasionally touching words.
If you haven’t checked whether you’re eligible for pension credit (the WFP trigger), I recommend you do so. Visit https://www.gov.uk/pension-credit/how-to-claimplease or call the claim line on 0800 99 1234 (open Mon-Fri 8am-6pm). It may take a while for your call to be answered. Let me know if you’re stuck on the phone for ages.
Also, check whether your energy supplier can offer you a discount on your bills. Lesley Main, a 70-year-old pensioner from the Barnard Castle area of County Durham, tells me she received a credit of £183 (the equivalent of six months of fixed energy charges) after applying for assistance from Octopus through its Octo Assist support fund. Other energy suppliers offer similar schemes.
Three final points on the WFP. The National Pensioners’ Convention will be holding a day of action on the WFP on 7 October, with a “protest” in Parliament Square, opposite the Parliament building (I will be there). Email me if you want more details.
Secondly, hats off to Jon Trickett for being the only Labour MP who had the courage to vote against the changes to the WFP. Worthy of a knighthood.
Finally, I hope the Chancellor of the Exchequer has learned from the WFP debacle and will resist removing the council tax discount for single people, which would affect many older people.
Investors still haunted by Woodford’s ghost
Fallen idol: fund manager Neil Woodford
The ghost of fund manager Neil Woodford, once the golden boy of the investment community, lingers, as readers periodically remind me.
A big thank you for Woodford’s latest missives from John Harris and Alan Berrow.
It has been more than five years since Woodford’s main investment fund, Woodford Equity Income, closed its doors due to severe liquidity problems. The fund was subsequently dissolved and compensation was paid to investors, albeit in small sums.
However, the other two funds, Woodford Income Focus and Woodford Patient Capital Trust, are continuing to move ahead, under the respective wings of Abrdn and Schroders.
Neither investment house has managed to shake off the Woodford curse. Abrdn UK Income Equity has underperformed its peers since Abrdn’s fund managers took the reins in February 2020. It has also underperformed the FTSE All-Share index.
Many investors have voted with their feet on the ground and the fund has been reduced from £250m in February 2020 to the current £163m. Although the ongoing fee is reasonable (0.64%), the time has surely come to merge the fund.
However, Abrdn’s problems pale into insignificance compared to those running Schroders Capital Global Innovation Trust (Woodford Patient Capital, as it was then)
For a time, Schroder UK Public Private). Try as it might, its performance has gone nowhere.
Sadly, it is still riddled with many of the same junk investments (mainly unlisted securities) that Woodford bought and which the current managers are unable to unload.
Over the past year, the shares have fallen by 23 per cent. In the past two and three years, they have fallen by 41 per cent and 70 per cent respectively. The share price is just above 11p and the trust’s capital amounts to £87m.
To put this into perspective, Woodford Patient Capital floated on the stock exchange in April 2015 with £800m of investors’ hard-earned money under its wing and the shares were worth £1.
Maybe the trust will recover, but I don’t believe in miracles. A vote will be held next year to renew the trust. Dissolution would put an end to everyone’s misery.
As for Woodford, we are awaiting a decision from the Financial Conduct Authority on disciplinary measures.
Whatever the verdict, it will not replace the losses that tens of thousands of people suffered by following the Pied Piper of fund management.
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