How long can insurance companies continue to tax the poor? JEFF PRESTRIDGE

Curbing inflation appears to be almost complete, according to the latest data from the British Retail Consortium.

According to figures, the cost of non-food goods (e.g. clothing and footwear) in our country’s stores fell by 0.6 percent year-on-year last month, while food prices rose by 3.4 percent (compared to 3.7 percent in March ).

It suggests the official inflation rate (3.2 per cent in the year to March) could be closer to 2 per cent when April figures are published by the Office for National Statistics later this month.

It’s a shame, then, that price inflation in the car insurance market has still not been suppressed – although the Association of British Insurers (ABI) would like the whole world and its dog to think otherwise.

In a press release issued six days ago, the insurance industry lobby group said auto premiums rose by just one percent in the first three months of this year.

True, but what it doesn’t say is that, compared to the same period last year, the average price paid for comprehensive car insurance was a whopping 33 percent higher (£635 versus £478).

That’s a huge increase, no matter how you parse the numbers. And of course the young and elderly in particular are paying much higher annual premiums than £635 – and have experienced bigger premium increases than 33 per cent.

In defense of the association, the general insurance director did admit that ‘the costs of car insurance are putting pressure on household finances’. (“The reversal is obvious,” I hear you say).

He also referred to the work the ABI has just begun to ensure insurance customers who pay for cover each month are treated better.

Currently, many who pay for coverage in this way (both for their home and their car) are faced with interest charges of more than 20 percent. It could mean that a motorist with monthly cover pays an average of £300 more per year than someone who pays in advance.

This price discrimination is justified by insurers on the grounds that they are essentially lending monthly customers their annual premium, which they repay in installments. But it’s an argument that few outside the insurance community accept.

The extra costs for monthly customers have been described by the financial regulator’s insurance chief as a “tax on the poor” as many households cannot afford cover otherwise.

Consumer group Which one? has called for “severe penalties” against the companies that charge the most serious charges. The ABI’s response was to publish a list of ‘principles’ that companies would like to adhere to. These aim to offer customers who pay in installments greater price transparency and better value for money.

The plan is then to report next year on how effective they have been in reducing the additional costs of paying monthly premiums. I believe it’s all a smokescreen to appease a regulator that the insurance industry has long revolved around – and continues to do so.

The losers remain the elderly, who are often the least able to afford the skyrocketing costs of insurance coverage – while continuing to assume that their long-standing insurer will always have their best interests at heart.

Nothing, dear readers, could be further from the truth.

If Worthing is worthy of the big banks, why aren’t other towns?

Seven days ago I spent a windy morning completing the Worthing half marathon.

At one point I thought I was going to be blown into the English Channel.

Then I wandered around the West Sussex town.

Although the high streets (like many across the country) have suffered greatly, it was good to see that all the major banks are still there: Barclays, HSBC, Lloyds, NatWest and Santander.

It begs the question: if they can all justify a presence in this town, why have they ALL left other locations worthy of a presence in the big banks – Windsor in Berkshire and Harpenden in Hertfordshire, for example?

Reply to jeff.prestridge@mailonsunday.co.uk.

Finally victory in battle for Philips Trust Fund

Finally, after a titanic battle, most victims of the Philips Trust Corporation scandal will receive the financial justice they richly deserve. Brilliant news.

Four days ago, three leading building societies – Leeds, Newcastle and Nottingham – agreed to compensate customers who lost money as a result of the questionable actions of this despicable company (now in administration).

This ‘financial support’ means that the losses that customers have suffered at the hands of Philips Trust are made up for. There will also be financial support for those whose properties have been transferred to trusts managed by the company.

The associations’ move is generous, as their role in this scandal was only one step away (they had no business with Philips Trust).

Yet it is an admission that they were wrong to encourage their clients to purchase (unregulated) wills and trust fund services from a third party, Estate Planning Group (EPG), – and receive a generous commission for doing so.

Most customers were elderly and relied on what their building company told them to do. Philips Trust later entered the scene and took over the management of trusts set up by EPG’s Family Trust Corporation. It was then put into administration in April 2022, leaving the funds in tatters.

In recent weeks it became clear that the three associations had to take action. They faced tough questions at their annual general meetings, while an early motion was tabled in parliament calling on society to cover the victims’ losses.

Reporting on the issue in this column and in many local newspapers also put them on edge – while the Philips Trust Action Group was relentless in its quest for justice.

By agreeing to absorb customer losses, the three associations have ensured that their good reputations remain intact.

The only sad thing about the deal is that it does not extend to smaller societies embroiled in this scandal. I trust they will now follow in the footsteps of their bigger rivals.

Banks must remove the national hub block

Thank you for your kind comments on my article last week about the success of the banking center in Cambuslang, South Lanarkshire.

Among those commenting was Derek French, the former NatWest banker who was at the forefront of the banking revolution. Without his passionate campaign there would be no hub in Cambuslang, or in 46 other cities across the country.

While Derek is pleased that these community banks are now coming to the aid of many towns where the last bank branch has closed, he does not believe their expansion will be as rapid as some claim.

Banking industry body UK Finance estimates that a commitment to fund 225 hubs (including those already in use) will be made by the end of the year. Yet Derek says this would only be possible if there was a ‘tidal wave’ of branch closures between now and December 31 in cities big enough to support a hub – and where Nationwide doesn’t have a presence.

Under current rules, the banks will not open a hub in a city where Nationwide has a branch, even if the building society does not offer business banking, which is essential for many local retailers.

Derek says creating 225 hubs is only possible if the banks remove this national ‘block’. I agree with that.