Most societies have cut back on this rip-off, whether by shifting savers out of the accounts, improving rates or advising savers to move. But many savings-rate improvements of this kind have been offset by general rate cuts elsewhere.The same jaundiced view could also be applied to some of the special mortgage-rate cuts. In this latest move, Northern Rock favoured borrowers of seven years standing or more. But earlier this year, the same society imposed redemption penalties on borrowers of less than seven years standing taking their mortgage elsewhere.

It should also be noted that a handful of lenders – Direct Line, for example – still manage to undercut the new standard rates on offer from societies favouring their existing borrowers.Building society Potential Out-of-date accounts Special bonuseswindfallNationwide pounds 530 Yes, but made competitive None plannedWoolwich pounds 690 Yes, but trying to convert savers None plannedAlliance & Leicester pounds 590 Yes, but point out better rates available None plannedBradford & Bingley pounds 600 Yes Next yearBritannia pounds 630 Scrapped Announcement this yearNorthern Rock pounds 500 Scrapped 0.29% off mortgage rate for borrowersof seven years’ standingBristol & West pounds 390 Yes, but made competitive None plannedYorkshire pounds 740 Yes, but made competitive Min savings rate 2.75%. Mortgage ratereduced to 7.85%Birmingham Midshires pounds 400 Scrapped PlanningPortman pounds 520 Yes, but point out better rates Plan to close None plannedSource of windfall figures: UBS. BONUS schemes that seek to prove the claimed benefits of being with a mutual organisation – where customers are also the owners – are all the rage currently, as we report elsewhere on this page about building societies. This week, a friendly society, the Harrogate-based Homeowners, also jumped on the bandwagon, claiming to offer the first scheme from a friendly society to involve real mutual value for its customers, called members. At the core of friendly societies’ business is the tax-free but high- cost savings plans they offer to small savers. Homeowners now says it is negot- iating better deals – whether in price or cover – on behalf of its members for various insurances, specifically motor, building, contents, personal accident and medical.

Homeowners says that unlike other such deals offered by friendly societies, it does not plan to make any money out of the arrangement
In my book, friendly societies have always been pretty low down the evolutionary scale in the mutual universe (which includes building societies, life insurers and the Co-op move- ment). One friendly society’s current efforts to drum up interest in its tax-free savings plan by giving away free corkscrews doesn’t exactly fill me with confidence.This latest wheeze from Homeowners does nothing to change my opinion. Showing the benefit of being with a mutual should be about more than giving customers a discount if they buy something else as well. That’s simply good business sense, customer retention and all that. It’s not nearly as mutual as reducing the rip-off on policies and products held by existing members, which building societies are already doing.AN INTERESTING little row has broken out about how good Direct Line’s motor insurance deals are. The Advertising Standards Authority this week ruled against Direct Line’s press advertisement “Every six seconds, somebody gets a better deal on their motor insurance”. It said Direct Line had not demonstrated that everyone buying was getting a better deal than previously.

So it should alter its advertising.Earlier this year, the ASA ruled against Direct Line for its catchline “Best for price, best for service”. Direct Line is going spare – this is the ASA’s third ruling against it this year (the other being about small print). It is complaining to the chairman of the ASA and says the latest ruling is “contrary to basic common sense”.The insurer accepts that it cannot offer absolutely everyone the cheapest cover available. But it says price is still the key for most consumers and that the vast majority of people who switch to Direct Line do so on the basis of price. Cynics might think some people buy Direct Line on the strength of its brand – that annoying little red phone on wheels that goes “beep beep” – without considering if there are even better deals elsewhere. If the latest ruling from the ASA encourages people to shop around to a greater degree, then more power to its elbow.TOO many supposedly independent financial advisers (IFAs) turn a blind eye to index-tracker unit trusts and PEPs despite their lower costs, predictable performance and in many cases good track records.One reason is that they are not big commission payers. Virgin Direct’s index-tracking Pep, for example, has made great play in its own sales pitch of not paying commission at all.