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Hello and welcome to Your Money, your weekly guide to making
the most of your cash ` enjoy it while stocks last!
They're not doing a very good job, says the competition watchdog.
But, could an investigation lead to fees for current accounts?
And, how to get married without saying "I do" to a massive bill.
Most of us don't pay a fee to have a current account at the bank.
It's often called free banking, but it's isn't really ` between us,
That means we don't know what our account actually costs us.
And that might be one of the reasons that so few
of us switch our bank accounts, even though many customers think we
The competition watchdog has announced it wants to carry out
a full investigation into the banks and into current accounts to find
out why the service and product is so poor, and how to fix it.
David Black joins us from a market research company. What is your take
on this? The big fear among cut some consumer groups is if you have this
investigation it will inevitably lead to the end of what we call free
banking. There is a worry that that will happen. The basic belief that
the competition markets authority has if there is not enough in
banking. As you said, a lot of people think all accounts are the
same, and not enough people switch. That said, there are some very
generous offers around, and a lot more people could do extremely well
financially by switching. And the argument is we don't switch because
we don't really know what it costs. Yes. So, it it feels, in some minds,
like not only will an investigation lead to the end of free banking, but
it should lead to the end of free banking. It is probably too soon to
judge that. It is one of the possibilities. If there is a full
investigation, the most likely result is that the bigger banks will
be forced to divest some customers. OK, though to force people to go to
other banks, rather than voluntarily as a mug yes. But customers will
think this is our money, we give it to the bank to look after it, the
bank takes it and makes a profit on it, why should we pay them a fee for
the privilege of making a profit on our money? If you look at just about
every other country in the world, there is no such thing as free
credit banking. Everyone pays fees. We are pretty unique in that
respect, but we are used to it, so it will be a big shock when letters
start hitting the doormats, if they do, saying you have now got to start
paying for it. We already have current accounts that charged a fee.
What do they cost? These are the package current accounts. An average
monthly fee would be ?15. They offer you various incentives. But the main
top`level incentives you get free travel insurance, free mobile phone
insurance, and motor breakdown cover. There are a variety of other
things as well. Interest`free overdrafts, that sort of thing. And
they are often criticised for being bad value because they sometimes
double up once insurance we have got already. And the cost of those per
month? Typically ?15. But if everyone had to pay for a current
account? I doubt it would be that high. There are various fee models
they could use. It could be a monthly fee or a fee per
transaction. Some will offer waivers or discount if you have other
products with the bank. David Black, thank you for joining us.
It's been a busy week for whip`cracking.
The financial watchdog is going to cap the cost of payday loans.
From January next year, borrowers will never have to repay more than
The interest that's charged every day will be capped at 0.8%
If you borrow ?100 and pay it back on time after 30 days, your interest
Borrowers who are late paying money back will be charged a maximum of
The total of all the interest and charges will be capped at 100% `
we won't pay back more than twice the amount we borrowed.
Three little nuggets of news, more details on the BBC website,
complaints about the big energy firms have more than doubled. Most
are about bills. Ofgem reminded people who rent their flat or house
that they are allowed to switch supplier to save money, and the
consumers Association said to double`check your child's car seat
if it was fitted by people at the shop because many don't fit it
properly. 42% of marriages end in divorce in
England and Wales. Despite that, weddings are not going out of
fashion. Another quarter of a million couples will walk down the
aisle this year. Congratulations to all of them. But, if the odds are
much better than 50`50, do you really have to spend ?20,000 on it?
Tessa got engaged six months ago. She is now in the process of
planning a perfect wedding. I have been dreaming of this day for a long
time. But the challenge of staying within budget is proving hard. You
have an idea in your head, but when you see something that is everything
you have wanted, you don't want to look at the price tag. As she
strives to create her perfect wedding day, she continues to be
amazed at how expensive flowers and photographers are. When I call up
people, I tend to have a figure in mind, and more often than not, it is
more expensive than I had planned. It is definitely coming as a
surprise, how much things cost. From the wedding dress and shoes, due to
the smallest details such as headpieces and confetti, it seems
the wedding premium continues to push budgets to the limit. The
average wedding, venue and catering will take a big chunk out of your
budget, costing on average ?9,500. Then there is flowers and
entertainment, which will cost you ?1200 each. And then there is the
all`important dress, Vail, shoes and the groom's suit. On average in the
UK, that sex couples back ?1700. So, how much will it all come to when
putting on your dream date quest like on average, ?21,000. Despite
this staggering number, many couples can spend a lot more. So, why does
it cost so much? There is far more work involved for wedding suppliers
then there is for any other if end. Beforehand, more meetings, more
changes of mind, perhaps, so to avoid the wedding premium, if you
like, it is important for brides to take their entire budget at the
beginning and leave 10% of that budget as contingency. It will
probably be spent on be dress, but it will certainly be spent. Think
about having fewer guests, and get married out of peak season, perhaps
even November. Anna was one bright that opted for a November wedding. I
would give anything to do the whole day all over again. She got married
in Cornwall near the beach where she grew up. Her off`peak season wedding
meant the venue was cheaper. My mum and I, we worked on the centrepiece
pieces together. Friends helped in a lot of ways. A good friend of mind
trained as a make`up artist, showed she did my make`up on the day.
Another friend designed and printed the order of service for us. So,
will Tessa be able to stay within her budget by the time the big day
comes? I will try my best to stay within budget, but the dress will be
hard to scrimp on. That's just hope the groom loves it as much as she
does. I am sure they will both have a
super day. That's all from us this week. You can keep up`to`date all
week long with the money pages on the BBC News website.
More again next week. Thank you for your company.
Let's go backed to our top story this morning. The Ukrainian
government has accused a Russian separatists at the crash site of the
nation airliner MH17 of trying to destroy evidence. Officials in Kiev