A rant about UK banks

Banking & Financial
1

Apologies for posting this on a forum that is primarily about France but I am so annoyed right now I just have to let off steam somewhere!

Backstory: in my father’s will he set up a Discretionary Trust to try and shelter some of the value of my parents’ house from UK Inheritance Tax.

The trust became redundant soon after he died due to changes in IHT allowances, but the trust remains in existence so we have to deal with it.

Ten years ago we opened a bank account with Lloyds for the Trust; this has had a sum of money sitting quietly in it ever since, no transactions in or out, and no interest paid by Lloyds of course as they “don’t pay interest on trust accounts”.

Lloyds have now said they are unilaterally closing this account at the end of this month, simply because they don’t want to be bothered with such accounts.

So we needed a new bank account. Very few financial institutions now do them for trusts - basically Metro Bank and a couple of obscure building societies.

So I set about opening an account with Metro. OMG what a rigmarole! Forms and more forms, a certified copy of the will, etc. etc.

After three weeks of waiting they have just got back to me rejecting almost all the paperwork - the forms have to have readable facsimile signatures (despite being sent to me as electronically signable), and the Will is apparently not properly certified as only the front page was signed by the lawyer not all the others.

They also want another certified copy of a document from when the list of Trustees was changed ten years ago!

Meanwhile, I went into Lloyds Bank this morning to close the account and get a cheque from them that I can pay into the Metro account when we finally get it opened.

Oh no, they can’t actually issue a cheque. It’s a bank, but cheques are unavailable if you turn up in person!!!

I am allowed to transfer the money to a different account, but of course we don’t have one, thanks to Metro taking three weeks to tell me my application was wrong.

So now we are just going to run out the clock on the old Lloyds account and then they will send a cheque in the post. Not registered or recorded delivery, just plain ordinary post.

By Royal Mail. The guys who are currently prioritising parcels over letters.

As you can imagine, I am spitting feathers…

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2

Sorry to hear that Lloyds are being quite useless as I’ve always had excellent service from them.

Credit Agricole on the other hand must have a hidden “Would you like us to **** everything up for you while we make the one change you have requested?” box that got ticked by accident recently.

Fortunately, the lovely folks manning the CA Acquitaine English speaking helpline have managed to unpick the knots tied by CA, Pacifica and Finaxy.

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Sounds like France mate, welcome!

The only thing missing is they haven’t lost something yet.

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Just a thought, but have you asked Lloyds about to whom they will send the cheque and to whom it will be payable ? Could be advantageous perhaps.

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Yes I wondered if they had somehow been taken over by a French bank . :smiley:

Yes I checked that with the polo-shirted loon that I spoke to in the bank; they are supposed to send it to the address that they have on file for the Trust which is here, and the cheque will be payable to the Trust.

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Do I sense a change of name by deed poll in the offing ? :slight_smile:

More seriously, if all of the Trustees signed a letter commanding Lloyds to make the cheque payable to another entity / person perhaps it might work.

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Yes the Lloyds Loon suggested transferring the money to another account - but by the time we got that paperwork by the Trustees done they would have closed the account - the deadline is 28th Feb!

It is what it is. I foolishly left the proces of setting up the new account until after Xmas as I assumed it would be easy (ha!)

And then having (as I thought) assembled all the correct paperwork Metro Bank took a month to tell me it was wrong!

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Hadn’t clocked you as a trustafarian, @ChrisMann :rofl:

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You mean they won’t give you a Banker’s Draft if pre-arranged ? I am finding that hard to believe.

And how on earth did Lloyds get away with not paying interest for 10 years? It beggars belief.

Wondering by any chance if The Post Office offered a better choice of account.

PS Metro Bank got done for some compliance stuff that probably didn’t really matter and since then they seem to be trying to be like every other bank ie awful to deal with, though previously they were so easy to.deal with and in person or phone they are still pretty good.

But I fear you may struggle when you hit French banking when you come here, this is tiny stuff in comparison :slight_smile:

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Except the post office is not really the post office for such matters, just an intermediary for other institutions.

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Or National Savings Bank? A bond if they will allow?

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And don’t forget he will be asked to provide each document at least 3 times.

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It wasn’t a “trust fund” in the usual sense - just a way of mitigating IHT that was recommended in 2005 but which became obsolete. The whole thing’s been a PITA, frankly, and will save zero tax.

Well perhaps they might have done, but I wanted to move the money from Lloyds to Metro in one go, that was the plan. Now it’s too late.

As for interest I have since found that some building societies do pay it on trust accounts, but they were the exception. I don’t know why it wasn’t a thing more generally. And then you get into having to make tax returns if the trust easns money.

Almost no fianncial institutions offer bank accounts to trusts in the UK any more. Lloyds claimed that “new financial regualations” were to blame for them withdrawing the service.

No the Post Office would not have worked. Trusts are a special category of “customer”.

Yes I know French banks probably have this lot beat, I was just venting my frustration really!!

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I remember. The idea was very fashionable back around then.

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I doubt that the FSA will allow Lloyds to close the account and keep the money. They will of course be allowed to freeze the account so as to prevent further transacvtions. I would suggest making an appointment to see the manager of nearest Lloyds branch and no doubt they will be able to sort something out, if only to prevent you from making a formal complaint to the FSA.

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Thank you for your thoughts, but you misunderstand me. What I meant by “too late” was it is too late to get all the Trustees to sign a letter requesting transfer to a different non-Lloyds account, before the account itself is closed (28th Feb).

They won’t keep the money, what will happen (they tell me) is that if we are umable to transfer the money elsewhere by 28th feb, they will close the account and send us a cheque, made payable to the Trust, which I will just have to keep in a very safe place until Metro Bank open the new account.

The money is not at risk, unless that cheque went missing!

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We had a long lecture from, I think it was Merricks solicitors about steering very clear of trying to write inheritance trusts. If the case was large enough we were instructed by our parent company to pass the case directly to Merricks. The at the time a very profitable industry was being turned over by HMRC to the point that even the best known schemes were getting turned over in the courts.

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Yes, the solicitor my parents used in 2005 to write their wills was an idiot. She put Discretionary Trust clauses into both their wills - I only recently discovered that my mother’s will also has one, so my next step (with my siblings’ agreement) is to get my Mum to make a new will with that clause removed.

The aforementioned numpty solicitor was also dead set against Equity Release, which in my mother’s case has been very helpful, so much so that we had to pay another solicitor to draft a letter of indemnity absolving her from all potential comeback, before she would allow us to proceed with the equity release, since she was a Trustee of my Dad’s pesky will trust.

It cost us £400 to get rid of her, basically.

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As a French resident, I tried to open an NS&I growth bond. They cashed my cheque in November, weren’t happy with my proof of address and identity in Jan, requesting amoungst other things, a sworn statement from the mayor in my village, and a copy of my French driving licence showing my address. As my French licence doesn’t have my address on it and they couldn’t offer me a satisfactory alternative means of proving my address. I had already sent copies of online bank statements- not acceptable as need to be printed by the bank! A letter from HMRC showing my address- not on their list of acceptable proofs, and a letter from DWP detailing my state pension start date- computer says NO! . At this point, I ran out of time, so the money I paid them in November was re credited into my account. Has anyone else residing in France had more success?

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Well that’s good then. So now it’s down to the long slog of paperwork to open another account.
I wonder if you have considered using an investment house to do the hard work for you, with the ultimate aim of having a managed trust account that would in fact provide some income.
Seems like some professional advice would not go amiss.