The rise of service charges

I received a letter the other day to say that my bank share service is now going to charge an annual fee. It seems that they cannot offer the service for free any more (you just paid a flat transaction fee) and they will be charging an account fee from next year – which surprisingly enough is in line with the other investment and share platforms fees that have been announced.

So that now means I will be paying about £130 annually in service charges. I could move to one platform  to cut costs,  but I am always skeptical of having all my eggs in one basket. I do wonder about the risks if anything goes wrong with them so I like to spread the risk across different companies, they don’t have the same financial compensation support that savings accounts have.

It is still unclear to me what the change in fees will have on my investment accounts as I have quite a few funds that are being converted. Looking at the historic returns they have been good even with the charges hidden within (7%+ pa), the new funds are not so good (4%+ pa) + charges to pay? I will need to review them and look to move to other funds once things have settled.

To add to this I have had more news:

My credit card company is now changing its interest rate rules. Instead of it being fixed and easy to work out what you interest would be (not that I use that facility, I pay off any balance on my card in full each month) it will be changing to become variable from next year. It will now be linked to the BOE interest rate and will move up and down with this when it changes on a monthly basis. Luckily, the rate has been static for ages but it appears that the credit card company are expecting this to change next year so are changing the rules now in anticipation of future rises.

I wonder how many other companies will start doing this too?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s