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  1. Banker-bashing may be all the rage if you believe what people say but actions speak louder than words. New research suggests nearly half of all current account holders are happy to let banks have the use of their money interest-free. Hot air has done nothing to hurt bankers’ bonuses. Widespread consumer apathy allows these high street institutions to continue to suit themselves when dealing with most people’s salaries and savings. Almost nine in 10 current accounts – more precisely 87pc – pay no interest on credit balances which typically total £130bn before pay day, according to CACI Current and Savings Account Market Database. As a result, 46pc of people who have credit balances in their current accounts at the end of the month are effectively subsidising the high street banks to the tune of many millions of pounds a year. Hetal Parmar of Santander, which commissioned the research, said: “Millions of people have money in their current account each month that could be earning interest. At a time where every penny counts, it’s important to ensure your cash is working for you.” The bank is keen to promote its 123 Current Account which pays 1pc when the balance exceeds £1,000; 2pc when it is more than £2,000 and 3pc above £3,000. That’s better than most but far from being the best you can do on the high street. For example, Nationwide Building Society pays 4.89pc on its FlexDirect current account and Bank of Scotland and Lloyds TSB pay 1.09pc on deposits as low as £1 on their Classic Vantage accounts. More than four years after the slow-motion bank robbery began, with the Bank of England freezing interest rates far below the rate of inflation, anyone with a credit balance needs to be vigilant to preserve the real value or purchasing power of their money. Just to stand still, with the Consumer Prices Index (CPI) stuck at 2.8pc as announced this week, a basic rate taxpayer needs an account paying at least 3.5pc, while a higher rate taxpayer needs an account paying at least 4.6pc. Sylvia Waycot of independent statisticians Moneyfacts.co.uk told me: “The impact of inflation on savings means that £10,000 invested five years ago, would have the spending power of just £8,870 today. “Savers could be forgiven for thinking they are the forgotten casualties from volatile inflation. This might be because the word ‘savers’ conjures up wealth when the reality is more to do with making ends meet. “Many people, particularly pensioners, rely on savings interest to fund day-to-day living expenses and today’s announcement will not ease the burden of a dwindling spending power from what are meagre savings returns.” Unfortunately, whatever the Government may say to the contrary, it prefers to punish the prudent and subsidise spendthrifts by allowing inflation to erode the real value of savings and debts. As the biggest debtor in the country, the Government is also the biggest beneficiary of the stealthy transfer of wealth effected by this slow-motion bank robbery. But, as pointed out in this space from time to time, savers outnumber borrowers by six to one. So the Government would do well to take account of pressure groups such Save Our Savers before the silent majority next gets a chance to make its views felt at the ballot box. In the meantime, we can all vote with our money by switching accounts. Link: http://blogs.telegraph.co.uk/finance/ianmcowie/100024092/how-millions-of-current-accountholders-subsidise-bankers-bonuses/
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