What caught my eye this week.
Considering the high hurdle that politicians and business leaders have set themselves for something to be considered a sacking offence, I was surprised to see the boss of National Savings & Investments (NS&I) resign this week.
Of course, the NS&I FUBAR was a rough experience for the 37,500 people affected. NS&I’s mistakes saw bereaved families facing delays accessing their relatives’ Premium Bonds with a total value of up to £476m.
To give just one example from a BBC report:
Tracy McGuire-Brown from Newbury in Berkshire […] took six years to claim £2,000 in premium bonds her late father had left in his will.
The 61-year-old former care home manager says she “cannot describe how upsetting and frustrating” it was to deal with NS&I, and that she had to send in her father’s will and other original documents at her own expense.
“It was the most awful, awful experience,” she says.
No doubt – and not what anyone wants to deal with in the wake of the death of a loved one.
However, NS&I has more than 24 million customers holding £240bn with the institution, so the number affected is relatively small. According to Which the problems were caused by administrative failures – bad, certainly, but not malicious. The long delay between problems emerging and NS&I coming clean is problematic, but again the scale of the operation mitigates this to some extent.
With all that said – and, again, not to make light of having to fight to get your own money back – I think the real reason boss Dax Harkins had to go was because NS&I is held to a higher standard than a typical High Street bank, on the basis of its 100% government backing.
Trust buster
I’ve often recommended NS&I savings or Premium Bonds to fretful – but essentially financially uninterested – friends and relatives looking for somewhere safe to put their cash. Especially after the financial crisis.
No worries about bank runs with NS&I, or Financial Services Compensation Scheme limits, or your savings somehow getting muddled up in riskier lending. Just okay interest rates, the infinitesimal chance to win big with ERNIE, and a recommendation made in the same vein as nobody getting fired for buying IBM.
Also, faith in NS&I’s systems underwrites the Premium Bond draw.
There are already conspiracies about which Bonds win and who gets what prizes. NS&I can do without incompetence creeping into the mix, too.
Further reading:
- A terse apology from National Savings & Investments – NS&I
- NS&I boss replaced as savers left waiting for millions of pounds – BBC
- What caused the missing NS&I savings, and what you should do – Guardian
- Another take on the scandal and next steps if you’re affected – Which
- NS&I will have to pay compensation in some cases, say ministers – This Is Money
Have a great weekend.
From Monevator
Commodities are working – Monevator
The natural yield model portfolio wheels are turning – Monevator [Members]
From the archive-ator: A plan to be financially independent in ten years – Monevator
News
OECD says UK will be hardest hit by Iran war, sees 4% inflation – CNBC
World faces ‘stark and deep recession’, says BlackRock boss – This Is Money
Temporary petrol shortages possible at some pumps, warns ASDA – Guardian
How Trump and the oil price move in sync [Charts] – BBC
Reminder: the state pension age rises in April – Which
Buying UK housing most affordable since 2015 on price-to-earnings basis… – ONS
…as London house prices drop again… – City AM
…but rents are at an all-time high relative to incomes – Sky
Final candidates for seven new towns named – BBC
SpaceX’s mooted IPO valuation is in another orbit – Sherwood
Government defends landlord tax hikes as ‘fairer’ system – Property 118
FCA launches later life mortgage [a.k.a. equity release] study – Mortgage Strategy
Who ate all China’s stock market returns? [Paywall] – FT
Products and services
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The savings accounts that will pay you up to 5% – Which
How to swap houses for your holidays – Guardian
Don’t rely on AI to find you the best savings deal – Which
Get up to £3,000 cashback when you open or switch to an Interactive Investor SIPP. Terms and fees apply, affiliate link – Interactive Investor
HSBC, Barclays, Nationwide, and Halifax hike mortgage costs – Yahoo Finance
Five-year mortgages now cheaper than two-year fixes again – Mortgage Strategy
Fixed-rate mortgages go above 5.5%, but 4% trackers are available – This Is Money
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
Natwest switch offer: £150, or £250 for Premier account – Be Clever With Your Cash
What are passkeys and why should you use them for security? – Oblivious Investor
The best and worst family deals at major UK attractions – Be Clever With Your Cash
Loft-style apartments for sale, in pictures – Guardian
Comment and opinion
Could the triple-lock be scrapped, and should it be? – This Is Money
Index funds work – Money Changes Everything
Echoes of history: what the oil shock means for your money [Paywall] – FT
Seven lessons from ‘enoughfluencers’ on how to live a simpler, happier life – Guardian
Yes you can beat the market by avoiding its worst days. But you won’t – Morningstar
Why are young people taking so many unwise financial risks? – Bloomberg Advisor Perspectives
Safe until crisis: what 300 years of wars reveals about government debt – CEPR
Your financial past isn’t true. Neither is your future – The Net Worthwhile Weekly
The quiet transformations that separate investors from stewards – Bogumil Baranowski
How to compare well – Mr Stingy
The woes of managing money for a friend or relative – Financial Samurai
Hendrik Bessembinder has updated his influential stock return study [Research] – SSRN
Naughty corner: Active antics
The big problem with UK investment trusts – City AM
VCTs brace for record season after ‘bonkers’ tax relief cut – This Is Money
The reality of setting up as a solo investment advisor – Flyover Stocks
Ex-US markets look a good bet for value investors… – Verdad
…as Verdad’s founder Dan Rasmussen warns on private equity and more – Arena
In Elon Musk’s mind, SpaceX and Tesla have already merged – Sherwood
Tetra Pak: the shape of innovation – Quartr
Kindle book bargains
The End of Reality by Jonathan Taplin – £0.99 on Kindle
Boomerang by Michael Lewis – £0.99 on Kindle
Money Men by Dan McCrum – £0.99 on Kindle
Economica by Victoria Bateman – £0.99 on Kindle
Or pick up one of the all-time great investing classics – Monevator shop
Environmental factors
Britain sets new wind power generation record – RE News
Green energy enquiries surge as households fear price spike – This Is Money
Plug-in solar panels to become legal in the UK – Which
Evan Davis: heat pumps work for me – BBC
Earth’s climate increasingly out of balance – World Meteorological Organisation
The carbon burden of US companies – Klement on Investing
An unstoppable mushroom is tearing through North American forests – BBC
Robot overlord roundup
So long, Sora – Spyglass
Human musicians are doomed – Klement on Investing
Inside China’s robotics revolution – Guardian
There will be no permanent underclass – Of Dollars and Data
Not at the dinner table
The world’s policeman is on the take – New York Times [h/t Abnormal Returns]
Treason in the futures market – Paul Krugman
There isn’t always a ‘long arc’ of morality – Noahpinion
Democracy watchdog finds Trump aiming for dictatorship – Guardian
There’s an information void at the heart of the Iran war – Bloomberg
The voter fraud fraud – The Bulwark
Off our beat
Cheap drones are reshaping the war in the sky – Reuters
Five years of lessons from running a bookstore – Ryan Holiday
“I escaped North Korea with my mum. But…” – BBC
The clock in our genes – Aeon
Scientists identify a speech trait that foreshadows cognitive decline – Science Alert
The indirect – and sometimes surprising – benefits of vaccines – Stat
Google search tips and hacks – Card Catalog
And finally…
“Human beings have a remarkable ability to accept the abnormal and make it normal.”
– Andy Weir, Project Hail Mary
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Thanks for the link to the WMO report, here’s a short extract:
“The Earth’s climate is more out of balance than at any time in observed history, as greenhouse gas concentrations drive continued warming of the atmosphere and ocean and melting of ice, according to the World Meteorological Organization (WMO). These rapid and large-scale changes have occurred within a few decades but will have harmful repercussions for hundreds – and potentially thousands – of years”.
Obviously these climatic changes will impact the global financial system and it would be good to hear the thoughts of other experienced investors on this. It seems to me with everything going on in the world, investing has become much too risky to continue any longer.
John -before you give up on everything perhaps reading an alternative view with blogs like ClimateSkeptics plus it’s reports might generate some perspective
Armageddon is a perennial human favourite and no doubt will occur at some point but probably not just yet-“Keep calm and carry on” is possibly a more viable state of mind to be in
xxd09
@John — I agree on the trajectory, which is one reason why I’ve included environmental links on this financial blog for many years and why I wrote this post 15 years ago:
https://monevator.com/environmental-degradation-and-wealth/
Alas, politics has gone even stupider and a significant cohort of the electorate more wilfully ignorant since then.
That said, I wouldn’t say it’s a reason not to invest. Everything has risk, including not investing, as we don’t know the future.
It’s also very unclear how outcome A will affect investment B.
Being diversified and factoring in the possibility for some long tail risks is the most rational response IMHO.
@xxd09 — Human-caused climate change is a proven scientific fact, supported by approaching 100% of serious scientists who have looked at it.
Have a look at this:
https://www.unep.org/news-and-stories/story/debunking-eight-common-myths-about-climate-change
As you know I have an especially low tolerance for anti-vaccine, anti-climate change, and similar unscientific quackery in these comments.
As the likes of @ZXSpectrum48K has amplified in these discussions before, this slide into unreason is causing major damage in the world – from politics to science to the environmental to global trade – so while I’ll happily accept a debate over say nuclear vs wind or on climate change mitigation versus climate change prevention, this isn’t the place for denialism.
There’s (alas) a big Internet out there ready to hear such inanity.
Re NS&I, I’m not sure that replacing the CEO with someone from HMRC can be considered an upgrade as far as customer service is concerned.
Thanks for the penultimate link, I learned something new that should be of help to get better search results.
@John Crises that are foreseen well in advance are almost never as damaging as widely predicted. I would have few concerns about the ultimate impact of something as slow-moving and generally understood as climate change on the global economy. What’s going to get us eventually is likely to be something sudden and completely out of the blue, maybe a super volcano, a massive Earthquake or a nuclear war.
@The Investor – thanks for the link to your 2010 article…excellent and some interesting comments.
Of course, 16 years ago, the global warming was just 1.0C above pre-industrial levels and we have now moved on to ~1.5C and on track for the critical 2.0C by 2036 as we see absolutely no sign of phasing out fossil fuels.
You referenced the global population at 7 billion, it’s now 8.3m and heading for 9bn by 2036.
We have another three years of Trump and judging from the chaos of the first year, I can’t imagine what he might do in that period but I certainly would not rule out the use of nuclear weapons as a last resort to save face over Iran.
I’m afraid of what’s coming down the line for my children and grandchildren and share the conclusion of the late James Lovelock – “the scientist who coined the Gaia thesis – reckons it’s already too late”.
http://news.bbc.co.uk/today/hi/today/newsid_8594000/8594561.stm
I would be really appreciate an update to your 2010 article to reflect the changes to investing risks during the intervening period…
I’m no climate denialist, but what does this actually mean ‘The Earth’s climate is more out of balance than at any time in observed history,’? Is it hotter, colder, getting hotter quickly? Out of balance just doesn’t mean anything. And what does ‘observed history’ mean? It’s such a rubbish, woolly sentence. Climate change is a problem for humans, not so much for the planet. It doesn’t care, it’s seen it all before, to far greater extremes. And on population, it’s already topped out, go and read some Rosling. Population is something that can be really accurately predicted well in advance.
@Rhino — You might try reading their huge report and accompanying data, rather than criticising an inevitably imprecise one-line summary.
I agree with your that the world doesn’t care, and even if we nuke it life will go on eventually. What should matter to human beings though is not nihilistic bravado but the relatively few short millennia more we’re likely to be around for it mattering to us.
Of course the Earth changes all the time, but the speedy pace of human-caused climate change in geological terms (and consequences such as species extinction and ecosystem collapse) is closer to the impact of an asteroid than a gradually reshaping over thousands of years.
I don’t have kids so it’s more a matter of abstract moral concern to me (and aesthetics I suppose) but if I had children or grandchildren I’d probably be on the streets with the activists. 🙂
@John Edwards — I am not sure I have much constructive to add. You could have looked at all this and thought ‘buy renewables sell fossil fuels’ (as one somewhat prominent UK investing blogger did before closing down their website a few years ago, on reaching similar conclusions to you). And then the wilfully ignorant elect the strategically opportunistic Trump and he goes on a war against green energy and says things like ‘drill, baby, drill’.
We’re not so far off from the generations who burned menstruating women as witches and worshiped rocks, I suppose.
Again, the best I can offer as a long-term response is diversify widely, don’t buy a home near an estuary, and be aware if you consider relocating to a country that can’t protect its borders as the impact on farming in say North Africa (already evident and driving population movement) really kicks in.
@reactive — Well I kind of agree, in all but the doomsday scenarios some kind of economy will survive. “Time bombs don’t explode” has long been a handy mantra of mine. Let’s not forget to add pandemics to your list.
@Bassavoce — You’re welcome, it’s a good one hey? A couple of weeks old but I made the rare decision to include it anyway given how useful it is.