Saturday, December 13, 2008

Interest Cuts Not Being Passed on

Today, I just feel like having a bit of a rant. It's interesting that when Economics hits your own pocket - you start to have a slightly different view on issues.

Firstly my mortgage company Standard Life have announced that since base rates have been cut by 2.5% since November they will cut their standard rate by 0.8%. That means my mortgage payments will fall much less than I had hoped. They cite:
"There have been significant and unprecedented changes within the economy and mortgage market in recent months. As a result, we have adjusted our standard variable rate accordingly and with a view to offering a sustainable rate in the long-term...."
What they really mean - the current volatility gives us an excellent opportunity to increase our profit margins. Thanks for your continued custom. :)

Well, there is an argument that banks need to encourage savings and therefore they shouldn't be forced to cut rates. But, I think 80 basis points out of 250 is still a bit greedy.

Direct Debit and a Clever Way for Firms to increase Cash Flow

Secondly, I pay electric and gas by direct debit. I always seem to be in credit to them (pay more than I use). My balance is currently in credit by £58. Anyway, they say that next year the direct debit will increase from £53 a month to £71 a month - stating something about seasonally adjusted consumption rates compared to average consumption levels.
I could argue with them and try to negotiate a lower monthly rate, but, the opportunity cost of wasted time talking to call centres means there is a strong incentive to ignore it.

1 comment:

Credit Card Offers said...

These are things worth ranting about!!! Very hard to understand how these companies can get away with enriching themselves so profoundly without the customer being able to do anything. They just dictate what will be done and do it and the customer has no say.