JEFF PRESTRIDGE: Breakthrough in banking hubs to save the High Street

Several banking moles have told me that ATM network Link will announce 15 locations where new banking hubs will open on Wednesday. Yay.

Hubs are the closest thing we have to community banks in this country, allowing customers of all the major brands to do basic banking under one roof – and (if they’re lucky) access to a representative from their bank one day a week. Hubs are replacing standalone banks, with Lloyds announcing a further 55 to close next year.

While there are almost two new hubs for every penny – so far, 148 have been recommended and 81 have opened – these latest 15 represent a major step forward. Why? Because the banks that fund the hubs – through an organisation called Cash Access UK – have finally agreed to change the rules governing where they can be established.

Currently, a hub can only be set up in a city that has lost its last bank. Even then, it can be ruled out because the banks don’t believe the city is big enough to support one.

They were also excluded from cities where Nationwide still had a branch.

Although it is a building society, not a bank – and offers no commercial banking services – the collective view of the banks was that a hub could not be justified where a Nationwide still stood proud. As pop band Sparks sang in 1974: ‘This Town Ain’t Big Enough For Both Of Us.’

But thanks to a combination of pressure from the new government and seasoned local bank campaigners such as Derek French, the banks have come to their senses.

Most of the 15 announced this week are in areas where Nationwide has a branch. Harpenden in Hertfordshire (French’s backyard) and Whitley Bay in Tyne and Wear are among the towns set to benefit. It’s a move the banks should be patted on the back for.

This announcement is supported by a new requirement placed on a bank: announcing the closure of the last bank in a city where Link recommends a hub.

The bank is not allowed to close its doors until the hub is up and running. That means there is continuity in banking services. With hubs having handled more than a million customer transactions to date, they are starting to take hold on our high streets, which, as consultants PwC said last week, are under pressure like never before. Banks, chemists and pubs are dropping like flies.

The next step is to improve the service provided by the hubs, even if it involves small changes such as installing printers so that customers can receive duplicate bank statements.

Last week, City Minister Tulip Siddiq urged the banks and Cash Access UK to improve services at a roundtable on banking hubs. Let’s hope the banks respond positively. Siddiq wants to see 230 hubs up and running by the end of next year and 350 by the end of the current parliament.

All 350 must be fit for purpose.

Ask energy companies to reduce bills

The abolition of the Winter Fuel Surcharge (WFP), passed by the House of Commons last week, is cruel and indefensible.

Sadly, despite all the campaigning from Age UK and Baroness Ros Altmann (and the heavy coverage of the issue in both the Ny Breaking and The Mail on Sunday), it appears that Chancellor of the Exchequer Rachel Reeves has got her way.

To all the readers who contacted me through WFP, thank you for your beautiful emails and letters – a mix of anger, passion and occasionally moving words.

If you haven’t already checked your eligibility for Pension Credit (the trigger for WFP), I strongly urge you to do so. Go to https://www.gov.uk/pension-credit/how-to-claimplease or call the claims line on 0800 99 1234 (open Monday to Friday 8am to 6pm). It may take a while for your call to be answered. Please let me know if you are on hold for ages.

Also see if your energy supplier can give you a discount on your bills. Lesley Main, a 70-year-old pensioner from near Barnard Castle in County Durham, tells me she received a £183 credit – the equivalent of six months’ worth of fixed energy bills – after applying for help from Octopus through its Octo Assist relief fund. Other energy suppliers offer similar schemes.

Three final points on WFP. The National Pensioners Convention is holding a day of action on WFP on 7 October, with a ‘protest’ on Parliament Square outside the Houses of Parliament (I’ll be there). Email me if you want more details.

Secondly, hats off to Jon Trickett, who is the only Labour MP who had the courage to vote against the WFP changes. Worthy of a knighthood.

Finally, I trust that the Minister of Finance has learned from the WFP debacle and will oppose the abolition of the municipal tax credit for single people, which would hit many older people.

Investors still haunted by the spectre of Woodford

The ghost of fund manager Neil Woodford, once the star of the investment world, continues to haunt me, as readers regularly tell me.

Many thanks for the latest Woodford letters from John Harris and Alan Berrow.

More than five years have passed since Woodford’s main investment fund (Woodford Equity Income) closed due to acute liquidity problems. The fund was subsequently broken up and compensation was paid to investors, albeit meagre amounts.

However, the other two funds, Woodford Income Focus and Woodford Patient Capital Trust, will continue as normal, under the wings of Abrdn and Schroders respectively.

Neither investment house has shaken off the Woodford curse. Abrdn UK Income Equity has underperformed the average of its peers since Abrdn fund managers took over in February 2020. It has also lagged the FTSE All-Share Index.

Many investors voted with their feet and the fund has shrunk from £250m in February 2020 to £163m today. While the ongoing charges are reasonable at 0.64 per cent, it is surely time for the fund to be rolled up.

Yet Abrdn’s problems are nothing compared to those of the people who run Schroders Capital Global Innovation Trust (Woodford Patient Capital as it was then known).

for a while Schroder UK Public Private). No matter how hard Schroders has tried, its performance has gone nowhere.

Unfortunately, the company is still plagued by many of the ‘dog investments’ (mainly unlisted securities) that Woodford bought and which the current managers are unable to sell.

Over the past year, the shares have fallen by 23 per cent. Over the past two and three years, they have fallen by 41 and 70 per cent respectively. The share price is just above 11p and the trust is capitalised at £87 million.

To put this into perspective, Woodford Patient Capital floated on the stock exchange in April 2015 with £800 million of hard-earned investor money under its wing and the shares were priced at £1.

Maybe the trust will recover, but I don’t believe in miracles. There will be a continuation vote next year. If the trust is dissolved, everyone will be out of their misery.

As for Woodford, we await the Financial Conduct Authority’s decision on disciplinary action.

Whatever the verdict, it will not make up for the losses suffered by tens of thousands of people who followed the Pied Piper of Hamelin of fund management.