Nationwide U-turn a blunder too far

By Jeff Prestridge for The Mail on Sunday
Updated:

 

What in the name of mutuality is happening at Nationwide, a building society that for a long time now has tried to do the right thing by customers?

Has its executive team, in a state of flux with the impending departure of boss Philip Williamson, temporarily lost the plot? It seems so.

First, two months ago, it bizarrely decides to acquire the assets of rival Portman, a deal that seems to benefit Portman's members and executives far more than Nationwide's.

Then, it is embarrassingly forced to admit that an employee has had a computer stolen containing sensitive details on more than 11 million customers, causing an outcry among consumer groups criticising the mutual for failing to inform customers of the security breach.

Williamson's defence of Nationwide's secretiveness on BBC Radio 4's Today programme is one of the most cringing, inept performances I've ever heard.

Now, most annoyingly, it has decided to abandon its much-lauded stance of treating all mortgage customers as equals.

It is now discriminating in favour of home movers at the expense of those looking to remortgage. Homebuyers securing a 75% loan on a £100,000 interest-only Nationwide mortgage will pay 4.98 per cent for a twoyear fix. Mortgage payments over the 24 months will total £9,960.

But someone taking out the same loan as a remortgage can only lock into a two-year fix at 5.08%. Over 24 months, payments total £10,159.92 - £199.92 more.

For an organisation that has spent millions on TV adverts stating that it is different because it treats new and existing customers the same and does not reserve its best deals for 'brand new customers only', this U-turn is even more embarrassing than Williamson's stonewalling of the fearsome John Humphrys.

It also flies in the face of work being done by the Financial Services Authority to get organisations to treat all customers fairly.

One executive mistake is unfortunate, two suggests carelessness, but three in less than a year indicates something is not right at Nationwide. It needs to get back in shape before its halo shines no more.

INDEPENDENT trustees have been big beneficiaries of the collapse of company pension schemes. While workers have seen their pensions disappear, these trustees have racked up eye-bulging fees, picking over the remnants of the failed schemes they have been appointed to oversee.

It is therefore refreshing to speak to an independent trustee who believes that the Government's dismissive treatment of pension wind-up victims is self-defeating and does little to restore confidence in the occupational pensions system. He also says that the current windup arrangements serve no one's best interests.

The trustee in question is Richard Main of Law Debenture, who for the past six years has been sorting out the calamitous collapse of the BUSM pension scheme (See Page 13).

On Friday, in explaining why it has taken him so long to work out how little the 550 deferred members of the scheme will get, he said: 'It often crosses my mind about the loss of goodwill to company pension schemes because of the drawn-out handling of failed schemes.

'Surely, it would be better for everyone if all the red tape was forgotten, the Government admitted that windup victims are in a situation they have no control over, that they should not be penalised, and that the Government should pay up.'

This is the message Financial Mail has been sending the Government for the past four years.

This Thursday, the issue of proper compensation for the 100,000 victims of failed schemes will, once again, be raised in the House of Commons.

I trust Ministers will take time out from calculating the size of their own rock-solid, enormous final salary pensions to listen to the views expressed. The payment of proper compensationis an absolute must. We know it and campaigners know it, as does Richard Main. Compassionate Ministers must also know it - but only they can bring it about.

WHILE the lives of BUSM members have been turned upside down, the situation for workers belonging to failed schemes arising from company insolvencies since last year is suddenly a little less desperate.

The Pension Protection Fund, set up to help such people, has started making its first payments to 46 wind-up victims in three failed schemes.

Understandably, the PPF has not wasted the opportunity for some PR, with chairman Lawrence Churchill speeding up to Girvan, Ayrshire, to present oversized cheques to some beneficiaries of PPF's largesse.

Interestingly, the first 46 payments are all unaffected by the PPF's payment cap. I just wonder whether Churchill would have been so willing to travel north if the first recipients were losing big chunks of their pension because of the cap.

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