I am told by various banking moles that cash machine network Link will announce on Wednesday 15 locations where new banking hubs will be launched. Hurrah.
Hubs are the closest we have in this country to community banks, allowing customers of all the big brands to carry out basic banking transactions under one roof – and (if they are lucky) get access to a representative from their bank one day a week. Hubs are replacing standalone banks, with Lloyds announcing 55 more closures next year.
Although new hubs are becoming almost two a penny – 148 have been recommended so far and 81 opened – these latest 15 represent a big step forward. Why? It’s because the banks which fund the hubs – through an organisation called Cash Access UK – have finally agreed to change the rules governing where they can be located.
Currently, a hub can only be set up in a town that has lost its last bank. Even then, it may be ruled out because the banks don’t believe the town is big enough to support one.
They were also ruled out in towns where Nationwide still had a branch.
Lone voices: Sparks sang This Town Ain’t Big Enough for Both Of Us
Although it’s a building society, not a bank – and doesn’t offer business banking – the banks’ collective view was that a hub couldn’t be justified where a Nationwide still stood proud. As pop band Sparks sang in 1974: ‘This Town Ain’t Big Enough For Both Of Us.’
Yet, through a mix of pressure from the new Government and longstanding community bank campaigners such as Derek French, banks have seen sense.
Most of the 15 to be announced this week are in areas where Nationwide has a branch. Harpenden in Hertfordshire (French’s backyard) and Whitley Bay in Tyne and Wear are among towns to benefit. It is a move which the banks should be patted lightly on the back for agreeing to.
This announcement will be supported by a new requirement put on a bank which announces the closure of the last bank in a town where Link recommends a hub.
The bank will now not be allowed to close its doors until the hub is up and running. It means there will be continuity of banking services. With hubs having carried out more than a million customer transactions to date, they are beginning to establish themselves on our high streets which, as consultant PwC said last week, are under pressure like never before. Banks, pharmacies and pubs are dropping like flies.
The next step is to improve the breadth of service that hubs offer, even if they are little changes such as the installation of printers so that customers can get duplicate bank statements.
Last week, City minister Tulip Siddiq impressed on the banks and Cash Access UK the need for better services at a ‘banking hubs’ roundtable. Let’s hope the banks respond positively. Siddiq wants 230 hubs up and running by the end of next year and 350 by the end of the current Parliament.
All 350 need to be fit for purpose.
Ask energy firms for a cut in bills
The axing of the winter fuel payment (WFP), passed by the House of Commons last week, is cruel and indefensible.
Sadly, it now looks that despite all the campaigning from the likes of Age UK and Baroness Ros Altmann (and a lot of coverage on the issue in both the Daily Mail and The Mail on Sunday), Chancellor of the Exchequer Rachel Reeves has got her wicked way.
To all those readers who have contacted me on WFP, a big thank you for your lovely emails and letters – a mix of anger, passion, and occasional tear-jerking words.
If you haven’t checked whether you qualify for pension credit (the trigger for WFP), I urge you to do so. Please visit https://www.gov.uk/pension-credit/how-to-claimplease or ring the claims line on 0800 99 1234 (open Monday to Friday, 8am to 6pm). It might take a while for your call to be answered. Let me know if you are left hanging on the telephone for an eternity.
Also, please see if your energy supplier can offer you a discount on your bills. Lesley Main, a 70-year-old pensioner from near Barnard Castle in County Durham, tells me she received a credit of £183 – the equivalent of six months of energy standing charges – after applying for assistance from Octopus via its help fund Octo Assist. Other energy suppliers offer similar schemes.
Three final points on WFP. The National Pensioners Convention is holding a day of action on WFP on October 7, with a ‘protest’ in Parliament Square outside the Houses of Parliament (I’ll be there). Email me if you want more details.
Secondly, hats off to Jon Trickett for being the only Labour MP to have the courage to vote against the WFP changes. Worthy of a knighthood.
Finally, I trust the Chancellor has learnt from the WFP debacle and resists scrapping the single person’s council tax discount – which would impact many elderly people.
Investors still haunted by spectre of Woodford
Fallen idol: Fund manager Neil Woodford
The ghost of fund manager Neil Woodford, once the golden boy of the investment community, lingers on, as readers remind me on a regular basis.
A big thank you for the latest Woodford missives from John Harris and Alan Berrow.
More than five years have elapsed since Woodford’s main investment fund (Woodford Equity Income) put up the shutters because of acute liquidity issues. The fund was subsequently broken up and compensation paid to investors, albeit meagre sums.
Yet the two other funds, Woodford Income Focus and Woodford Patient Capital Trust, chug along, under the respective wings of Abrdn and Schroders.
Neither investment house has shrugged off the curse of Woodford. Abrdn UK Income Equity has underperformed the average of its peers since Abrdn fund managers took over the reins in February 2020. It has also trailed behind the FTSE All-Share Index.
Many investors have voted with their feet and the fund has shrunk from £250 million in February 2020 to today’s £163 million. Although the ongoing charge is reasonable at 0.64 per cent, surely it’s time for the fund to be merged away.
Yet Abrdn’s travails pale into insignificance against those running Schroders Capital Global Innovation Trust (Woodford Patient Capital as was and then
for a while Schroder UK Public Private). However hard Schroders has tried, its performance has gone nowhere.
Sadly it is still plagued by many of the dog investments (primarily unlisted securities) that Woodford bought and which the current managers are unable to offload.
Over the past year, the shares are down 23 per cent. Over the past two and three years, they have fallen 41 and 70 per cent respectively. The share price stands at just above 11p and the trust is capitalised at £87 million.
To put this into perspective, Woodford Patient Capital launched on the Stock Exchange in April 2015 with £800 million of investors’ hard-earned money under its wing and the shares priced at £1.
Maybe the trust will recover but I don’t believe in miracles. Next year it will hold a continuation vote. Winding up would put everyone out of their misery.
As for Woodford, we await a Financial Conduct Authority decision on disciplinary action.
Whatever the verdict, it won’t replace the losses that tens of thousands incurred by following the Pied Piper of fund management.
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