Julian Knight: Good banking costs less at Sainsbury's. Really?

Saturday 17 October 2009 19:00 EDT
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( PETER MACDIARMID / GETTY )

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Does the idea of a genuine challenger to the banks in the mortgage, current-account or savings markets fill you with glee? Think of it, trusted brands such as Sainsbury's or Tesco could clean up with their extensive branch networks and reward-card schemes. Particularly as the bankers sabre-rattle over ending "free banking" if they don't get their way over unfair charges.

Tesco has said it plans to move into mortgages and current accounts in the next few years, while Sainsbury's launched a big expansion of its banking last week. The centrepiece was an offer to give people taking out a savings account, credit card, home or pet insurance double Nectar reward points. A customer buying all four products and spending £50 a week in store could expect to earn £130 in Nectar points. All good?

Drill into the small print and Sainsbury's offer is much less generous. Claim on your home and pet insurance, see your savings dip below £5,000 or miss a credit-card payment and you stop earnings points. So if I'm burgled, my bonus gets nicked too (and my premiums will go up, no doubt)? Thanks a bunch. The brave new world of banking looks awfully similar to the old one.

Leave budget airlines alone

The Office of Fair Trading is investigating firms using confusing tactics and baiting customers. May I suggest it doesn't bother with the budget airlines? After the OFT announcement, Ryanair was instantly wheeled out by the BBC as a prime example of firms giving one price at the outset then charging far more. But if the OFT wants to find baiting and confusing marketing, this is not the place to look. Try ticket agencies (as I've mentioned before) or your local high street, with its shops in permanent sale, or closing down – "everything must go". (One shop near me has been "closing down" for a year now.)

Budget airlines are watched like a hawk by the OFT and the Advertising Standards Authority, and while they do levy charges upon charges, you can avoid them with a bit of planning. I'm no fan of Michael O'Leary, but many in the media get sniffy about these airlines purely because the great unwashed use them.

Borro.com rides to MPs' rescue

At last, help is near for our downtrodden and persecuted MPs. Online pawnbroker Borro.com says it will offer any MP struggling to repay expenses a loan at half the standard interest rate. Paul Aitken, Borro.com's founder, said: "MPs are well-heeled individuals [too right!] who are faced with extraneous expenses who maybe don't have the liquid assets to cover the immediate cost."

Indeed, a duck house or John Lewis chest of drawers is hardly a liquid asset, but I wonder if Jacqui Smith's husband will be availing himself of this different type of pawn?

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