UK Banking in 2010 – An Era of Sensible and Conservative Banking?
Perhaps unsurprisingly, the wake of the credit crunch has coincided with an increased awareness among the UK public as to how important it is to save rather than spend – and to become less dependent on credit and loans. This has been particularly evident among younger savers such as students learning from the mistakes of their parents, yet recent research from Abbey has found that families are still finding it difficult to save for a rainy day.
To stimulate the trend towards saving, the UK government have recently announced that three new banks will appear on the high street in an attempt to boost competition at a time of low interest rates, and to ultimately – according to Gordon Brown – ‘return to an era of sensible and conservative banking. So how is this era going to feel for the average saver?
In terms of new names in banking, it is likely that there will be few surprises. The recognisable Trustee Savings Bank (TSB) is set to become its own entity once more after being amalgamated with Lloyds Bank in 1995. Additionally, The Telegraph also tip that the publicly owned Northern Rock will be resuscitated too, while the perhaps less known Williams and Glyn’s Bank (formerly part of RBS) is also set to make a comeback.
The general opinion from financial spectators is that the emergence of three new banks will add to competition on the high street and be a benefit to the customer – especially in terms of savings rates and banking services. Of courses, to assume at this stage that the moves will be directly financially better for the customer is a little naïve – and although the attainability of mortgages across the UK is said to be getting easier a simple increase in the number of banks may not be sent o affect this in the short term.
However, as 2009 drawers to a close we will also see new regulations set to make the sector more customer orientated. Starting in October the FSA have imposed new rules which will mean that banks have to give at least two months notice if they intend to cut savings rates. This will give savers considerable forewarning in order to assess the rates elsewhere and ample time for them to switch should they wish to do so.