Loyalty to your bank will hurt your pocket
Michelle Slade, analyst at Moneyfacts.co.uk, comments:
“Many people are loyal to their bank and go to them for everything from their current account to their mortgage and credit card. However, by doing so you could find yourself seriously out of pocket as the big named banks do not tend to have the best rates.
“By shopping around and opting for the best buys, you could save yourself substantial amounts of money.
Borrowing
Institution |
Mortgage |
Loan |
Credit Card (Interest payable on £3K debt, no intro deals, repaying minimum) |
Total Cost |
Increase on best buy |
Barclays (Woolwich) |
£26,187.08* |
£1,821.60 |
£903.28 |
£28,911.96 |
£2,366.60 |
Lloyds TSB (Cheltenham & Gloucester) |
£25,266.46 |
£1,753.80 |
£2,439.67 |
£29,459.93 |
£2,914.57 |
HSBC |
£24,302.60 |
£1,744.80** |
£2,131.17 |
£28,178.57 |
£1,633.21 |
Royal Bank of Scotland |
£24,181.88 |
£2,155.80 |
£3,324.72 |
£29,662.40 |
£3,117.04 |
Halifax |
£24,774.24 |
£2,106.60 |
£4,367.80 |
£31,248.64 |
£4,703.28 |
Abbey |
£24,609.80 |
£1,544.40 |
£3,324.72 |
£29,478.92 |
£2,933.56 |
Best Buy |
£24,149.88 |
£1,492.20 |
£903.28 |
£26,545.36 |
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* Figure based on 3 year fixed over 2 years |
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Saving
Institution |
Savings |
Current Account (1-years interest on £1K in standard current account) |
Total Interest |
Lost interest on best buy |
Barclays |
£187.65 |
£0.00 |
£187.65 |
£209.39 |
Lloyds TSB |
£175.00 |
£40.00 |
£215.00 |
£182.04 |
HSBC |
£99.91 |
£1.00 |
£100.91 |
£296.13 |
Royal Bank of Scotland |
£70.19 |
£1.00 |
£71.19 |
£325.85 |
Halifax |
£25.02 |
£51.20 |
£76.22 |
£320.82 |
Abbey |
£140.00 |
£80.00 |
£220.00 |
£177.04 |
Best Buy |
£308.65 |
£85.00 |
£397.04 |
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Source: Moneyfacts.co.uk 11.8.08 |
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Institution |
Total increased cost/lost interest |
Barclays |
£2,575.99 |
Lloyds TSB |
£3,096.61 |
HSBC |
£1,929.34 |
Royal Bank of Scotland |
£3,442.89 |
Halifax |
£5,024.10 |
Abbey |
£3,110.60 |
Source: Moneyfacts.co.uk 11.8.08 |
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“Consumers who are loyal to Halifax are the hardest hit, finding themselves over £5K worse off, with Royal Bank of Scotland customers not far behind at nearly £3.5K. HSBC customers come out best by being just under £2K worse off, but that is still a large amount, particularly in the current economic climate where every penny counts.
“The big banks trade on their names and it is disappointing that they do not offer more competitive deals to their customers.
“Particularly when shopping for a mortgage, customers need to make sure they do their homework in order to secure the best deal possible. Mortgage brokers do not have access to 100% of deals, so borrowers should make sure they are aware of what deals are available direct from lenders.
“The institutions are keen to tempt savings and current account customers through their doors and as a result have made switching as easy as possible. Current account institutions have switcher services which transfer your existing regular payments for you.
“The banks are not loyal to you, so why should you be loyal to them?”
Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.
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