What caught my eye this week.
I used the Current Account Switch Service (CASS) for the first time a few weeks ago.
As the founder of a financial blog, I guess this might make me sound like one of those presenters who sheepishly admits in the middle of a TV makeover show that they’ve never held a paintbrush.
It’s not quite that bad. While I confess I still have my student bank account – for all the good such loyalty did me when I needed a chunky mortgage – I’ve always had a couple of other accounts on the go for their higher rates or perks.
There must have been a dozen since the Egg days. It’s just I’ve always done any switching between them for myself.
I’d read enough to know the CASS would probably work fine. But it was still nice to hear my girlfriend’s confidence as a several times user of the service.
Sure enough, the cash and scheduled payments appeared to be transferred away from my dying Santander 123 Lite account in good time, like those diplomats being airlifted off the roof of the US embassy in Saigon in 1975.
And as best I can tell a month later, they were. Everything seems to have gone super smoothly.
The snag
What was surprising though was to get a ping from Monzo this week saying my credit rating was down with one of the reference agencies.
Quite the plunge, too. From nearly 1000 to a good-for-normies 800.
Huh. Nothing else has changed with my personal finances recently except for this switch. And as I say it wasn’t even from my oldest bank account.
The move did see me close down the account that has handled the lion’s share of my direct debits for years though, due to it once touting excellent cashback. So I presume the agency’s computer was alerted to this and cried “shenanigans!”
It’s no biggie. The downgrade doesn’t hurt anything except my sense of perfectionism. The other agencies haven’t raised an eyebrow, and I presume this one will come good soon enough, too.
That said our recent post on stoozing did get me thinking I should ramp up my interest-chasing efforts again, just for the fun of it.
Also now I’ve used the CASS, it’s easy to envisage swapping around a dedicated switching account with a couple of non-core direct debits attached, just to collect the bonuses.
Such cash freebies would be welcome enough. But to be honest they wouldn’t move the dial much at my stage of the game compared to the faff involved.
However this whole episode has been a good reminder of how useful hands-on experience is. I write much more about investing than money matters, but still – perhaps I should keep a toe in these waters? Just like those TV presenters might want to have a bash at doing up their spare room.
Whether the credit agencies would endorse such resurgent vigour is another question!
Have a great weekend.
From Monevator
Low-cost index funds – Monevator
Catastrophe bonds: Getting paid to weather risks – Monevator [Mogul members]
From the archive-ator: Personal time management for fun and profit – Monevator
News
Egg and butter prices are driving up UK inflation – Guardian
UK energy bills to rise by more than expected ahead of winter – BBC
Property tax threat slowing down the housing market [Who knew?] – Guardian
Middle-Eastern buyers swoop on cheap prime London property – City AM
Bank shares swoon on fears new windfall taxes to come in the Budget – This Is Money
LSE gets the go-ahead to run new Pisces private stock market – City AM
There are now more ETFs in the US than stocks – Bloomberg via FA Mag
Wall Street ‘mocks’ idea of London listing, says UK fintech boss – City AM
Unemployment will rise to Covid heights, says think tank… – This Is Money
…with half of UK job losses so far in hospitality, say bosses – BBC
Corporate bond investors have a razor-thin safety net [Paywall] – Bloomberg
Products and services
Energy bills to rise with Ofgem price cap hike in October – Guardian
Four ways to keep your energy bills down – BBC
Get up to £1,500 cashback when you transfer your cash and/or investments to Charles Stanley Direct through this affiliate link. Terms apply – Charles Stanley
Private medical insurance perks: are they worth it? – Which
‘Rent a room’ scheme: how to earn extra money by getting a lodger – Guardian
How Santander’s new ‘blur app’ feature could save you from scammers – Which
Get up to £100 as a welcome bonus when you open a new account with InvestEngine via our link. (Minimum deposit of £100, T&Cs apply, affiliate link. Capital at risk) – InvestEngine
Apple hikes TV streaming fee – Money Saving Expert
Why travellers are flying abroad… for day trips – BBC
Mid-century homes for sale, in pictures – Guardian
Comment and opinion
Reasons to be bearish about US stocks – Of Dollars and Data
Vanguard defends its controversial 70/30 stocks/bond call – Morningstar
Bitcoin is built to fail – The Small-Cap Strategist
Where have all the contrarians gone? – A Wealth of Common Sense
How to [not] beat the market – Humble Dollar
What National Insurance on rental income could mean for BTL – This Is Money
Do you have 600 years for house price growth to deliver? – Propegator
Why wait? Mini retirements and living a big life [Podcast] – Boldin Your Money
Return factors for REITs [Research] – Alpha Architect
Working late mini-special
Save the UK state pension by taking it away from the under-75s – The Times
Why we’ll all be working into our 70s – This Is Money
Naughty corner: Active antics
Why the bond market is fertile ground for active management – Morningstar
Which bond funds held up the best in the post-pandemic bond rout? – Trustnet
The ‘sell America’ trade was basically only in April – Axios
Yet another look at big tech concentration and valuation – Novel Investor
Strategy’s sagging Bitcoin strategy – FT
Kindle book bargains
Too Big to Fail by Andrew Ross Sorkin – £0.99 on Kindle
50 Economics Ideas by Edmund Conway – £0.99 on Kindle
Mastering the Business Cycle by Howard Marks – £0.99 on Kindle
Or read one of the best investing books written – Monevator shop
Environmental factors
Heat pumps could halve heating bills with energy system reform – Guardian
How to work out whether you should get solar panels – This Is Money
Japan has opened its first osmotic power plant – Guardian
London’s ‘wet wipe island’ just got bulldozed [With video] – ABC News
Collapse of critical Atlantic current is no longer ‘low’ likelihood – Guardian
Robot overlord roundup
General Partners: AI investors are navigating ‘peak ambiguity’ – FT
How to argue with an AI booster – Ed Zitron
One in ten UK banking jobs at risk from AI… – City AM
…and more claims AI is taking jobs from young people – Derek Thompson
…though job churn is nothing new – Seth Godin
US Intel – Stratechery
Getting an AI impersonator to teach your own students – The Conversation
Not at the dinner table
Minister takes on Nigel Farage over Brexit deal… – BBC
…but Farage should be held to account for Brexit write large – Guardian
Reform prepared to deport 600,000 under migration plans – BBC
Where are the UK’s asylum seekers coming from? – Sky
Why calling anti-asylum protestors ‘fascist’ doesn’t work – Guardian
Worst economic experiment ever – Daniel Drezner
Off our beat
The electric slide – Not Boring
A case study in how ecological conflict halts new housing [Podcast] – A.L.T.I.F.
Blood diamonds and the geographic lottery – Forking Paths
The secrets of lost luggage auctions – Guardian
Advice for the truly productivity-challenged – Raptitude
The happiest place on Earth – Slate
Chickenpox jabs introduced as UK vaccination rates fall below herd immunity levels – Guardian
Why Gen Z has had enough of working from home – Guardian
And finally…
“Choosing individual stocks without any idea of what you’re looking for is like running through a dynamite factory with a burning match. You may live, but you’re still an idiot.”
– Joel Greenblatt, The Little Book that Beats the Market
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I have got used to my scores bouncing all over the place, they seem to have very little correlation to either my actual situation or even my state of indebtedness. The reference agencies love consistency though and as someone always on the lookout for another money-making opportunity, I rarely give them that.
The bank switches can be very lucrative, if you have the patience for it. I usually have a “burner” account on the go with a couple of small direct debits just in case a new switching opportunity comes up. I expect they’ve closed the loophole now, but at one point it was possible to switch to Natwest, RBS and Ulster Bank at the same time and bag £200 from each (since technically you hadn’t benefitted from a previous offer). That was a good week.
The Bloomberg Corporate Bond story. There are two yields in a spread, but the article headlines the fall in corporate yields, not the ongoing rise in sovereign yields.
You very much should keep a toe in those waters! Stoozing is certainly not for me, nor was matched betting (is that still a thing?) but it does no harm to know how they work.
Thanks for the post as always. Some interesting stuff this week. I really like the Bitcoin substack article, what were your thoughts on that? I changed my bank around 3 years ago from Santander as well, was very easy in my experience too, I didn’t get any changes to my scores personally but it definitely shows it can happen.
The Raptitude article on productivity resonated. I think I was in the centre of his distribution while I was working, but since retirement have definitely slipped to the left tail!
> I still have my student bank account
Yay! Me too 😉 I will wear my TI approved slacker’s badge with honour! They got terrific value out of their effort at Freshers week at Imperial over 40 years ago. Except that they never got to lend me any money after my 20s, so I have probably been deadweight for decades.
@TI. To be honest, I much prefer it when you have a rant about Brexit or the US slide into what might be best termed competitive authoritarianism. Activities like stoozing and switching current accounts leave me utterly cold. Perhaps leave that to Martin Lewis or next you’ll be do articles on couponing!
The Times article by Tim McPhail is more interesting than the clickbaity title suggests, as a strategy it seems to me to make some sense, especially considering young workers now will benefit from auto enrolment for their working lives. Unfortunately there are no figures provided on the potential effects of this.
I also enjoyed looking at that house on the Isle of Dogs. I remember surveying sites there pre Canary Wharf being built, it was a desolate place. They must have been very gung-ho to go for that at the time. And you get the impression not much has been done to that house since about 1985.
Thought about a new bank account around imminent Scottish Independence some years ago -I was moving to England
New bank account was all set up but independence didn’t happen
I did notice however that my rather large Visa credit limit on my current provider -well over £10000+ would not be available any time soon on the new account and I would need to start from a £3000 base only -a real stopper as all our spending (large -holidays and small-groceries) is on Visa-for safety and the month credit (This is especially useful in retirement)
No switching in the foreseeable for me
xxd09
In terms of possibilities for writing about switching banks here, I’d guess you’ll be hard-pressed (IMHO) to compete with MSE. They’re sending their weekly email out to something like 10 million people, so 1 in 6 of the adult population.
Since 2015 I’ve used their bank switching guide to weaponise the process, have done scores of transfers (I’ve lost track), earned somewhere between £3,500 and £5,000 in transfer incentives, and have ended up with 9 current accounts simultaneously on the go now.
It’s a pain when I have to get all the interest details / certificates together before doing my self assessment and I wake up in a cold sweat sometimes when I think that I can’t remember all the PIN numbers. But eventually they all come back to me.
Problem is, eventually, you exhaust all the offers you’re eligible for, and then you’ve run out of road for a while.
You need to plan the minimum outbound Direct Debits carefully (Chip, Moneybox etc let you pay in via DD, so they can be used to manufacture zero net cost DDs), have multiple ‘sacrifice’ accounts eveready from banks which never pay an incentive, but which you’ll use just as the switch in account to move to a bank that does, and have a hub account to bounce the minimum monthly funding requirement for each account back and forth between the different accounts.
When banks were paying bugger all interest in the 2009-21 period it was the only way to make turn on money on account.
Did it hit the credit rating? Yeah. A little, and each time, but it went back up within 3 months, and never was like the reduction you’ve just experienced @TI.
Maybe because you were doing something different to the long established profile the credit agency had for you perhaps (?), whereas if you’re doing a switch every 3 to 6 months the credit rating agencies possibly just get used to it, such that their systems then realise that another switch does not mean anything material in terms of creditworthiness.
Haven’t tried stoozing yet though.
Maybe that can be the next project 😉
If I do it then I’ll approach it like military plan of attack.
My credit score is also irrelevant as I’m old school so don’t buy things that I can’t afford to buy outright. However I looked out of interest, and having the same bank account for 46 years is a good thing, but only having around £10k credit limit on cards is a bad thing, or so they say. I have all cards on 100% payment by DD, and have had for decades, and would really struggle to rack up more than £10k on them in a month.
This does mean I need move money to our current account when buying (for example) a car, but just waving my ‘phone at them when I’m asked “How will Sir be paying?” makes it worthwhile.
Credit scores are irrelevant to lenders. Lenders make their decisions based on the information held on you by credit reference agencies, and every lender will have their own criteria.
The scores are just an eye-catching metric to persuade people to pay for access to their credit records (albeit, as you’ve pointed out, some banks provide this info for free if they have a tie-up with a specific reference agency.)