Alliance Turning Towards the Financial Dark Side

Following in the footfalls of many of its high street competitors, Alliance and Leicester have announced that it will no longer accept new clients onto its Online Rescuer and Direct ISA accounts. The interest rate for the Online Savers account is also being cut from 5.35% to a consecutive 5%.

Richard Brown of the financial comparison website Moneynet believes that Alliance and Leicester (A&L), inch common with its high street competitors, have seen its costs rise as a consequence of recent regulation changes covering things like the manner mortgages and general insurance are policed. He added, “Unfortunately it’s the consumer who shoulders much of this further burden”

It looks to many of their loyal clients that A&L is indeed determined to do their clients pay in an attempt to purge costs and encouragement their profits. These cuts are only the up-to-the-minute of a series of changes that A&L have got made during recent months. First to travel was the cashback strategy on their Moneyback credit card. The Moneyfacts financial information website pointed out in February, that A&L had increased the APR on their credit cards for all purchases up to 16.9%; arsenic well as increasing punishment fees, and introducing punitory new clauses to current accounts. Other charges have got got been introduced to their mortgage products, balance transfer fees on credit cards, reductions in children’s nest egg accounts, whilst The Guardian have revealed some suspect changes that have been implemented to their systems to increase the number of clients who breach their overdraft agreements, triggering punishment charges.

A&L have said that there is no concealed agenda, and that it still leads the manner compared with its banking rivals.

A&L however, are not the lone financial grouping to be feeling the pinch. Barclays, HBOS and Royal Bank of Scotland have got all warned about credit arrears. An proclamation concerning occupation losings at Scots Widows, came alongside admittances from their proprietors LLOYDS TSB that there was, “An addition in the number of clients experiencing repayment difficulties” with their credit card debts and unsecured personal loans. According to Lloyds' Head Executive, Eric Daniels, we are currently experiencing, "a slowing consumer environment".

Recent proclamations by the Treasury delivered the worst monthly populace borrowing figs since records began in 1993, re-igniting fearfulnesses over a possible rise in taxes.

Consumers are reducing the amount they borrow on credit cards and analysts foretell mortgage lending in the United Kingdom will plump by 10 per cent over the adjacent three years, as the out of control growing in house terms finally stalls.

Independent market analyst Datamonitor claims, lenders who have got been enjoying a roar in recent years, will fighting to keep the impulse and be forced to work harder to secure market share.

Investor Connections, a grouping of independent financial advisers, have called for an accurate appraisal of the UK's current economical position, after statistics showed the three chief plus classes, shares, chemical bonds and property are all experiencing downward trends.

This downswing should spell good intelligence for borrowers and homeowners, as the mortgage and credit industries fight for clients and sharpen up on their competitiveness; however the grounds of Lloyds TSB’s actions looks to contradict this. With HBOS forced to criticise the other credit card companies for failing to supply clients with adequate merchandise information, despite perennial petitions to make so from consumer anteroom groupings and guard dogs on the Treasury Select Committee, it looks like the bulk of finance companies are currently out to protect themselves and their share-holders, with small respect for their customers.

At a clip when United Kingdom consumers are proportionately saving less than one-half of what they were 25 old age ago, you might be forgiven for thought that competition in the banking human race would be becoming increasingly cut-throat in order to derive customers’ business, but it looks that the large establishments are instead looking to travel down the path of cost reduction to protect their profits. There are nest egg are out there to be made, but they are nest egg in costs to be made by the finance companies, at the disbursal of the consumer, rather than good nest egg for the customer.