* Prices may differ from that shown
There's a saying that if you owe the bank £100 then it is you that's in trouble but if you owe £1000 then it is they who are in trouble, which is exactly the case with Northern Rock, regardless of Richard bloody Branson, which is also some sort of business proverb n less
The U.K and U.S economy upturn in the nineties was based on the housing and credit industry, big business and consumers given the comfort of being able to get credit when they needed it, whether they could pay that money back or not, the minimum 3% a month option the solution to those particular worries, which most of us do. Capitalism relies on people buying crap they don't really want to expand the economy, and a lot of people have been doing just that with money they don't really have and will never pay back, hence the phrase 'on the never never'.. The last desperate ploy to avert the tidal wave that has just hit us was to allow anyone to go bankrupt and clear all their debts in just two short years with minimal penalty-Brown writing off some of the national debt and then the punter starting all over again. The problem was that lots of young single people with no assets just went nuts on the cards and these cheap mortgages and then expected to wipe out all the loss this way with no pain. Wrong!
Brown and Blair's principal economy drivers have indeed been credit cards. If you look around your house right now there's a lot of stuff there that is absolutely useless and the money saved would have fed a whole African village for a year, but the reassurance you get from the right to buy that junk is that ethos for keeping things feeling good in our lives. The feel good factor. But now that decadence has caught up with us and we have to take the pain. Hands up who hasn't been called into your branch for a 'friendly little chat' of late, the bank manager hoping to squeeze protection insurance or more savings out of you.
I'm an account holder with Northern Rock and when I saw those queues I admit I did threat a bit. But I also knew Brown had to restore confidence in the banking industry by doing what he did...Me not joining the throngs. I don't blame anyone for queuing though. So far the Bank of England has coughed up 25 billion pounds of our money, three billion of that already spent, the rest as collateral. Now that's not the American million-a thousand millions-but the British version-a million millions-a grand from every tax payer in the land. It's a phenomenal amount.
The next bank in line to be holed will be Alliance & Leicester, their unsecured loans around 40% of their business. There's one more bank in the list that has taken big loses but fortunately it is manageable, so not to worry. Most other banks have more savings than investments, and so money they don't have to pay back to anyone and eventual stability.
Tomorrow I'm going to physically close my account at Northern Rock because savers and investors have now withdrawn 13 billion, much more than I realized. When no serious buyer came forward by Friday's deadline that suggested the Bank of England is not prepared to write off this huge loan, and so the Feb deadline is when the bank will be sold, probably at a ludicrously low price. In September it was worth 7.1 billion. Today it's worth 765 million, 11% of its original share price. This is a collapse of Enron proportions.
We hear today a Richard Branson consortium reckons he can save it, repaying 11 billion of that 25 billion, but still 14 billion short. The government is still keen to get more than 40% of that public money back, some even talking about nationalization. Branson's team says they will pay it all back over the next three years. If he could do that then why can't Northern Rock do that? Where is Branson bowing this capital from that the Northern Rock and many more big banks can't? I'm still not convinced about this ban in the long term. It needs to be engulfed by another bank to survive, not the PR king.
Northern Rocks problem is systematic of how modern financial systems are intrinsically unaccountable and unregulated, huge amounts of debt allowed in the mechanism with no real way of covering it. Because top execs and city boy's and girls wages and bonuses are based on risk then it gets out of hand. Not only that but the biggest banks and lenders seem not prepared to tell each other how much they have lost, so cant now lend to each other, the so called credit crunch.
Northern Rock borrowed 70% of its operating capital from the money markets, most of it now going critical in a off-shore Jersey holding company, the loss incalculable to the damage it's causing here. They borrowed far too much, all this down to greed so to have enough liquid cash to generate new business, buying houses and selling mortgages to people that couldn't really afford bricks and mortar. They weren't prepared to be a small local building society anymore.
We just don't know how much credit there is out there and how much of it will have to be written off when the housing price crashes and recession bites, which is inevitable next year. If banks announce huge losses then the stock price collapses and there value follows soon after, as well as the top executives jobs, which will mean even less money to lend out. It's just hard to state how catastrophic this is to the world economy. Mortgage approvals are down 37% in October alone in the UK and set to fall even more. It's not only house loans that are dropping but business loans too; small companies in need of start up or contingency loans are just not getting them. Any business owner knows that if the bank doesn't want to lend then they can't expand or function in their business effectively, which means job losses and profits slashed.
The problem is there aren't enough houses to go around now and so the market has dried up. Just about anyone who has been trying to buy a house in the last ten years has-rather foolishly-been allowed to buy one. All those people who can't really afford a mortgage in the long term are now in big trouble as interest rate rise. We are on the cusp of the most spectacular housing crash ever, not helped by those silly £400 'Hip' home sales kits. Not only are they pointless and expensive but many think they are really just a Trojan horse to get into houses so to revaluate properties into a higher council tax band, especially now that a lot of people have improved their homes with that positive equity, but not had their council tax move up to where Brown wants it.
I had a basic savings account that was earning that seemingly lapidary 84p a year interest and the money there for emergencies. I'm not going to shift it to another high street bank that I know doesn't have so much sub-prime loss.
I figure after this data theft from those two discs that a significant number of mums would have Northern Rock accounts and knowing their accounts have bee compromised now is a good time to change banks.
I also asked the NR not to send me monthly statements as I never use their cash machine and only have a savings account; every letter delivered another chance to suffer bank fraud via the 'posties' or TNT. My main account is under attack from fraudsters I another rbank so I need a plan B. The thought of all my direct debits bouncing is scary.
The quests aside Northern Rock were essentially a northern bank and only spread south when they started giving out mortgages like flesh eating diseases in our hospitals. They have that traditional trusty high street look about them and the service was fair but efficient.
The queues at lunch time seem OK in the only branch I know and the staff courteous. Even though they are no longer handing out mortgages like the American army does candy.
An over ambitions bank over extended itself and took too much risk, allowed to happen by various financiers making money out of that risk. Enron was allowed to do what they did because everyone got paid to help hide the debt-even the accountants! I do hope the banks have learnt their lesson this time and this cant happen again. Remember Barings Bank?
Ive been having some problems with Internet security and under advice I decided to move my almost insignificant funds from an Internet account into a more secure scheme. I thought of postal banking. My father bless his soul came up with Northern Rock. A building society that became a bank, it is now the 8th largest UK quoted bank by market capitalisation and in the FTSE 100 companies on the London Stock Exchange. Its size adds something to the security of banking here.
I checked out the website at www.northernrock.co.uk . It offers a friendly and simple front end; the user interface becomes increasingly complex as you search for your specific product. The site HOME page offers the usual Help and Contact details.
Financial products fall into 4 major categories mortgages, savings, loans, and credit cards.
CORE BUSINESS - At 56 branches, postal, telephone and Internet.
Mortgages - retail, wholesale and commercial.
Retail savings - including a selection of ISAs.
Credit cards - developing my own.
They also offer OFFSHORE ACCOUNTS these are based in Guernsey and are operated by post or the Internet. There are also facilities for banking in Ireland.
Ive just started using the Silver Savings Account that offers a high interest instant savings at competitive rates. Rates are linked to the Bank rate until 2010. Details below.
AN EXAMPLE - SILVER SERVICE ACCOUNT
The account is postal and telephone banking is available.
The website I reviewed earlier has details on the account; you can find it at northernrock.co.uk . I managed to get further details from a leaflet posted to me from a London branch. It outlines the terms and conditions set out as rights and obligations.
It has a useful section outlining the meaning of words and expressions including BACS and CHAPS.
OPENING THE ACCOUNT
The account can be opened by anyone over 50 years of agent.
But not for business purposes or for a club.
You must be resident in the UK for tax purposes.
The account has minimum and maximum deposits. If the balance falls below
a minimum amount the basic interest will apply.
Money back or switch to another account if within 14 days.
PAYING MONEY INTO YOUR ACCOUNT - DEPOSIT
How to pay money into an account.
You can make payments into your account by CASH (branch) CHEQUE or TRANSFER.
Minimum payment deposit into your account is £500 (as above).
Additional conditions applying to payments by cheque.
You can pay cheques into your account through a branch or post cheques to head office.
Post dated cheques not issued or accepted.
Clearing - cheques drawn on English and Welsh branches of banks will clear on the 4th day. Scottish and Northern Ireland will clear on the 5th. Similar conditions apply for deposits.
TAKING MONEY OUT OF YOUR ACCOUNT - WITHDRAWAL.
You can take money out of an account by CASH, CHEQUE, and CHAPS but not by instruction through email, facsimile.
By CHAPS before 13.00 hours on the same day.
MOST RECENT UPDATES
If the account falls below £10,000 the interest rate will drop to significantly. DEPOSIT AND WITHDRAWALS MIN £500. The present gross interest rate is 4.64%...for deposits of £5000 or above. Interest paid after deduction of income tax at lower rate of income tax. Claims for rebates to the Inland Revenue.
The bank has the advantages of a small bank; these are normally reflected in the interest rate for larger deposits. Because of its size ease of access can be a problem (not much at high street level). This is the major reason for not choosing any other but the postal and banking account. Since opening the account there have been some major developments in the development of the credit card. The opportunities to develop off shore banking are attractive particularly in Ireland with the development of the euro. I find my account with Northern Rock useful for longer-term savings rather than current. The fact that it separate from my high street bank gives something of a sense of security by diversity. The account I opened will have been for the convenience of postal banking and as such offered a good deal on interest rates. The fact that the rate is tied to the base rate helps. The major draw back I found will have been time constraints on obtaining cash and convenience. Updates on other products at this bank to follow.
You can contact HQ at:
Northern Rock PLC.
Northern Rock Hse.
Gosforth, Newcastle upon Tyne.
NE3 4PL tel: 0191 285 7191.
They also offer OFFSHORE ACCOUNTS these are based in Guernsey and are operated by post or the Internet. You can contact them at:
PO. Box 521
St Peters Port,
Guernsey, Channel Islands.
There are facilities for banking in Ireland as well.
We have had our mortgage with this bank for 30 months now and i couldn't be happier. They are nice to talk to we are always getting personalised mail explaining any new services any changes to their systems. In whole i have to say that Northern Rock are the best bank/ building society i have ever dealt with. If it weren't for the fact that you have to keep the account in a certain amount of credit and money has a tendancy to get spent when it is around me i would do all my banking through Northern Rock. They offer a great interest rate on Mortgages 4-6% fixed rates depending on what you want. On personal loans 8% on any amount. Everything can be processed over the phone apart from the signatures on the agreement forms. Their staff are polite and friendly, both in their banks and on the telephone. They are not aggressive at all if for some reason a bill is not paid for a month. ie. when we recently moved bank accounts a payment was missed due to a delay in setting up a direct debit, we were given as much time as we needed to pay this and there were no nasty letters etc. They are in general a nice bank to deal with and i would recommend them to anybody in search of a mortgage or loan.
Having taken the plunge and finally gone online with my HSBC current account I needed an online savings account. The idea of just transfering money online to my little slush fund appealed to me, after all I needed a safe home for all my new found ebay wealth! Also the thought of standing in a queue with a little passbook and the horror that is LT when she's BORED made online saving become even more attractive. Research was done - well OK I looked at the interest rates in the Observer one Sunday morning and opted for the Norwich and Peterborough B/S - well they had the highest interst rates! After a quick snoop around the site I realised I need to have another account with them before I could open an online account - far to much like hassle! So back to the Observer and we then logged onto Northern Rock. This former building society did a nice little account called the Online Tracker account. Interest rates were competive, access to my money was assured 24 hours a day, paying in and out could be done via my HSBC account or by sending them a cheque. Helpline numbers were fully displayed - as if I'd need them! So I duly signed up. The signing up process was slow.....it took 3 attempts to finally give them all my details. I duly recieved a welcome pack from them and as is the norm sent them 2 peices of ID and an intial deposit of a £1. Within days my account was set up and I transfered money over to the account. A couple of days later I went to log in again. With the Northern Rock there is a very stringent security system, the log in page takes about 3 minutes to down load, you have to imput your special customer number - given to you when you initially register, your password - you choose that when you register and then 2 out of 3 of your security questions. All of which are case sensitive. The security questions are the usual place of birth, mothers maiden name and first school attended. Log in went well until we came to th
e first school attended -after two attempts it disabled my account. I was advised to phone the helpline. 24 hour access doesn't apply to the helpline! The helpline - as with most helpline was busy when I rang, finally after a morning of trying I got throw. After explaining the situation I was advised that another password would be sent to me within 3 working days. It was a friday when I rang, I assumed as this was an online service I'd get an email from Northern Rock, security concious as ever I recieved a letter with the new password in the following Thursday! So much for the within 3 working days... Back I went to the slow as ever log in page and logged in. Changing my password back to the original was easy and I was back online. The above senario happened again with one of my security questions, so again I rang the helpline, again I waited for the new password and again intial logging in was fine. Then it happened again, so calls to the help line were made I asked if I could change the security question but was informed I'd have to write to them to do that, emailing wasn't an option -so much for an online account! As I said before the security questions are case sensitive, once I recieved the new password for the 3rd time I very carefully noted exactly how I typed in that particular security question and didn't have any problems logging on for about 6 weeks. Each time you log in you are asked 2 out of 3 of your security questions. Just before Christmas it was the turn of my "problem" question to come up, carefully I typed in the answer as I'd done before and you've guessed it the account was diable for the 4th time! Again a call was made to the helpline, this time I was totally fed up and asked to just close the account, I was informed that I could only do this online! I'm still waiting for the new password. In its favour the Northern Rock online tracker account does have a very
stringent security - as I found out to my cost. It also has a vey competitive rate of interest, which can be paid either monthly or annually. Once you have gained access to your accounts its relatively simple to operate the account. Money can be transfered to your current account using the BACS system - you'll find that you should get your money with in 3 working days to your nominated account. Paying money in can be done either by using the BACS system or by sending them a cheque to their head office. You can also open different accounts, should you want to save for different things and view them under your one customer account number and transfer money easily between those accounts. My reservations against the tracker account included the fact that if you do run into bother the helpline is only open during certain times, the long wait to recieve a new password, the fact that it can be painfully slow in down loading the log in page - the blurb on the page says it can be up to 20 minutes!!! Also for a so called online account the support mechanism is all off line. All I want is to get my mits on my money!
Northern Rock jumped on the conversion bandwagon in 97 along with Halifax, A&L, Woolwhich and Bristol & West. It paid out a higher windfall on average to the others because it was smaller and had less members, and is now the smallest bank in the UK. A lot of people see being a small bank it does not have the facilities to serve customers as a larger bank. However, if we look at Barclays, one of the worlds biggest banks we see in the press and elsewhere what it's done: closed branches, cash machine charges ect. Northern Rock is small, is personal with it's customers and has a stable branch network. Therefore, it's always looking out for it's customers, offering them better deals (many of which are in the best buy tables). But this isn't what a bank is supposed to do! It's supposed to be ruthless, offer appauling rates and bad service. I think the truth is that Northern Rock only converted because it saw a lot of the big names doing so. It still acts like a building society, with it's customers always able to have a say on how it's run. "As solid as a Rock, the Northern Rock" ;-)
Since the conversion of Northern Rock BS to PLC in 1997 it has introduced a whole range of NEW and competitive SAVINGS Plans and mortgages. I have been with Northern Rock since 1993 (prior to their conversion) and they have always offered fantastic rates on both mortgages and savings. It is now in a more favourable position as it has become one of the UK's 11th largest banks offering high performance products by using cost effective methods..read on…see how. After conversion they launched a new range of telephone and postal savings accounts called “Save direct” which are operated via a call centre, not branch based, hence cutting down costs of branches/ and offering the benefits to the customer. You will be amazed to learn how effective the range of Northern Rock’s Save Direct savings plan really are, starting from just £1 you can earn 6.0% gross with instant access. The save direct savings account is a postal/Telephone account (hey!! Don’t worry it is very quick to open** and is definitely quicker to open than a Nationwide internet e-savings account –see my opinion on Nationwide E-Savings for details.)** I telephoned them and got an application pack within 3 days, and within a week my new account was open. Simple. No fussing, no endless e-mail messages trying to track your application such as some internet accounts. I opted for the Save direct's "Base rate tracker" account (6.5% gross)which basically 'guarantees' an interest rate that is no lower than UK Bank Base Rate, as an introductory bonus they offered me an additional 1.0% gross on top of 6.0% gross, that was till May 2000, now that has expired the additional bonus is 0.5%, making a total interest rate of 6.5% gross instant access* on balances from only £1 upwards. This is great, usually in order to earn higher interest rates such as these you either: a)have to have a huge bank bal
ance in the region of £10K or b) be prepared to store you cash away for ages!! With your application pack you are given some pre-paid 1st Class envelopes should you wish to post cheques into your account or vice versa, if you wish to take money out of your account. This is only one method, a faster method of paying money into your Northern Rock savings account would be to set up a standing order, if you wish to make regular payments. Also when you wish to take money out, you can arrange an automatic bank transfer to your current bank account, for example. There are no extra charges for this facility. The telephone line uses a local call rate number (0845) and is available 24hours a day, the operator is available from from 8am-8pm. The automated service options, for which you need a pin no. are available 24hours where you can check balances, make withdrawals to your nominated bank account (e.g current account), get details of your last 5 transactions, inform of change of address etc etc. *the save direct account allows you to make upto 6 withdrawals per year, which is fairly reasonalble, as most of the others only allow one withdrawal per year!!* Its main function is a savings account, so its advisable to save (all those pennies from dooyoo..hopefully- to save for something and then transfer automatically to your current account. Overall, I am very impressed with this telephone based postal banking service its has proved to be quicker than internet banking(in some instances!!!)
Northern Rock is currently the 5th largest UK mortgage lender, the largest financial institution based in the North East of England and one of the most cost efficient UK mortgage lenders based on key performance ratios.