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Barclays chair agrees ‘in principle’ with end of free banking

Barclays chairman Sir David Walker says he agrees “in principle” with the end of free banking and believes charging for bank accounts may have avoided recent UK misselling scandals.

In his first interview as chairman, Walker told The Sunday Telegraph that widespread misselling of products such as payment protection insurance and interest rate swaps was “the consequence of not charging for bank accounts”.

He said: “Because banks are not charging, it drives them inexorably into this sort of position.”

Walker, who carried out a review into banking in 2009 and jointly reviewed the FSA’s report into the failure of Royal Bank of Scotland last year, was appointed to the chairman role last week to replace Marcus Agius.

His comments echo those of Bank of England executive director Andrew Bailey, who warned free in-credit banking was a “dangerous myth”.

Speaking in May, Bailey said: “I worry the banks may not properly understand the costs of products and services they supply and I worry also this unclear picture may have encouraged the misselling of products that is now causing so much trouble.”

Evolve Financial Planning director Jason Witcombe says: “I am not convinced the fact that people do not pay for bank accounts should be an excuse for misselling or that banks would not have been so aggressive in selling other products if customers had been paying for bank accounts.”



Economists turn on Osborne’s economic plans

Economists that previously backed chancellor George Osborne’s deficit reduction programme are now calling on him to change his plans and boost the economy through spending. On 14 February 2010, 20 economists wrote to the Sunday Times backing Osborne’s policy to eliminate the structural deficit over the course of the parliament. The Conservative MP hailed the […]


Scottish Life targets drawdown market with investment offering

Scottish Life is targeting the income drawdown market with the launch of five new investment portfolios for its ‘governed range’. The new ‘governed retirement income portfolios’, due to be launched on 29 August, are diversified, multi-asset portfolios and are designed to meet the needs of people who want take regular income from their pension. The […]

Skandia reveals unbundled platform details

Skandia has revealed the details of its unbundled charging structure, which will see the platform operate a tiered charging structure ranging from 0.5 to 0.15 per cent. Assets worth up to £25,000 will be charged 0.5 per cent, assets of between £25,001 and £100,000 will be charged 0.35 per cent, between £100,001 and £500,000 will […]

Aviva and Pru pledge to review pension exit fees

Aviva and Prudential will review the exit fees charged on old pension policies following pressure from industry experts and politicians. Skandia says it has no plans to scrutinise its back book, arguing that the terms of the contract were “fully disclosed” when these products were sold. Aviva UK Life chief executive David Barral says: “We […]


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