Paul Gosling joins the Belfast Telegraph to write a weekly column helping readers get their finances into shape. He already writes a weekly column on personal finance for the Belfast Telegraph’s sister paper, The Independent, where he is the paper’s ‘financial agony uncle’. Paul has also written for the Financial Times, The Times, the Irish Times, the Mail and most other UK and Irish quality papers. He has written several books on finance, IT and public policy. Before becoming a financial journalist 20 years ago, Paul was an advisor to co-operative businesses. He has also been an accountant and was an elected councillor for a large English city. Paul has lived in Londonderry for the last 10 years and can often be heard on BBC Radio Foyle commenting on public policy and the economy.
Northern Ireland’s financial scene is different from that in the rest of the UK. Many of the UK’s best known banks have only a small presence here. Instead the market is dominated by four banks, which are all now heavily supported by their home countries’ governments.
Ulster Bank is a division of the Royal Bank of Scotland – which means that it is effectively a nationalised institution of the UK Government. The Bank of Ireland is being rescued by the Irish Government, on which it depends. First Trust is a division of Allied Irish Banks (AIB) – and is similarly being rescued by the Irish Government. Northern Bank is a division of Danske Bank, the largest bank in Denmark and which has received support from the Danish Government.
Several other banks have recently increased their involvement in the Northern Irish market, including HSBC, Spain’s Banco Santander (which owns Abbey and Alliance & Leicester) and Lloyds (which now includes Halifax and is partly owned by the UK Government). The Nationwide Building Society also has a strong presence in Northern Ireland.
Of those financial institutions that are genuinely owned and controlled in Northern Ireland, the largest is probably the Progressive Building Society. The Progressive is the biggest building society that only operates in Northern Ireland and is one of the 15 largest in the UK. The City of Derry Building Society also operates only in Northern Ireland, but is one of the smallest in the UK.
The Financial Services Authority (FSA) regulates the way that banks and building societies carry out their business in Northern Ireland, as it does in Great Britain. This means that, for instance, it checks whether the institutions treat their customers fairly.
Although Northern Ireland’s two building societies are registered by our Department of Enterprise, Trade and Investment (DETI), they are regulated by the FSA – both in terms of the way they trade and their fitness to trade. This is different from the situation with the failed Presbyterian Mutual Society (which was not a building society), which was registered and regulated by DETI.
Credit unions in Northern Ireland are also registered with and regulated by DETI. The legal framework for credit unions here is very different from that in Britain. Reforms were proposed recently by a committee of the Northern Ireland Assembly and its suggestions are currently being considered by the UK Government.
If consumers feel they have been mistreated by any bank, building society or insurer operating in Northern Ireland, they can complain to the UK’s Financial Ombudsman Service (FOS). FOS says that awareness of its services here is much lower than in the rest of the UK.
Where a person living in Northern Ireland buys a financial service from elsewhere – for example, buying an insurance policy over the internet from an insurer or broker in the Irish Republic – they may be subject to a different dispute resolution service. In some cases complaints can be made to FOS, but not always. FOS does not cover complaints against Northern Ireland credit unions, unlike those in Britain.
So, in many ways, Northern Ireland finance sector operates differently from the rest of the UK. But in other ways it is very different. These variations can make it difficult to understand how the financial services sector here works – and what legal rights consumers have. This column intends to help readers understand how the financial sector works, what rights consumers have and how they can claim those rights.
** Next week – How to keep your money safe
Best credit cards
Tesco PF / Clubcard MasterCard 0 per cent for 12 months
M&S Money / MasterCard 0 per cent for 10 months
Lloyds TSB 0 per cent for 6 months
Progressive Building Society 2.75 per cent for £500, postal 7 days notice
City of Derry Building Society 2.25 per cent at £1,000; 3 per cent at £50,000
Five year fixed rate mortgage
Chelsea Building Society 4.34 per cent*
HSBC 4.39 per cent*
Abbey 4.89 per cent*
Progressive Building Society 5.50 per cent*
Ulster Bank 5.65 per cent*
Supplied by Moneyfacts – www.moneyfacts.co.uk