Every August the same renewal letters land on my doormat.
Plonk, here is the car insurance. Plonk, there is the home and travel. Plonk, the car tax, the council parking permit. If you want to know why it is so hard to drum up new clients, then perhaps consider this tiresome pattern.
With the arrival of each letter you have to hunt around on a comparison website – to find a cheaper price from the very same company you are already with.
You call up: press one, press three, enter your policy number, enter your date of birth, press five, wait to speak to a person, ‘We’re experiencing high call volumes right now’, Dire Straits comes on.
Put phone on speaker, potter around, then 10 minutes later a human voice – just as one of the kids comes in to ask what you are doing.
Give them your policy number (again), give them your date of birth (again). One minute later and you have been offered the same price as online.
No apologies, no excuses. This is just the acknowledged dance of modern life.
It does not have to be like this.
But despite various investigations, embarrassing front pages in national newspapers and warnings from regulators, general insurers still persist with this infuriating practice, just to catch out the lazy, the disadvantaged and the time-poor.
And then just when you think it is all over: plonk, the life cover.
Of all these bills it is this latter one that annoys me the most, and it is all because it only goes up with inflation.
I cannot pretend I have shopped around for a policy for five years or so.
But every year the increase exasperates me because it is linked to retail price index and not consumer price index. It is a deliberate ruse that is being used to get a few extra pennies out of me every year.
As we all know the use of RPI as a measurement for rises in the cost of living is outdated and inappropriate. The national statistician from the Office of National Statistics has described it as poor measure of inflation.
Generally, while it does occasionally fall below, it is above CPI by about one percentage point.
This problem is of course not just limited to life insurance, but also to pensions.
Some annuities and older defined benefit schemes have a contractual obligation to increase payments by one or other measure – some simply say ‘inflation’.
When it is the latter case, invariably schemes have moved to use CPI as a measure, when it is the former they have had to stick with whatever the contract says.
There is nothing I can see in my policy documents that says my premiums must rise with RPI – and I have tackled Legal & General on the phone about it.
But their call centre staff just do not seem to care.
The point is that the premium increase may only be a few quid a year, but it adds to the few quid a year before and so on.
I do not have the energy for the fight, not after dealing with the home and travel and car and water and gas and electricity and phone and broadband and mobiles and TV and... you get the point.
And this is why some people’s accounts are in such a mess and why so few can find the time to get proper financial advice that will save and make them some real money.
Cleaning up UK policies
The world always starts turning again in September after the deadly nothingness of August. We have already got talk of a pre-Brexit budget.
It is hard to see what policies our new chancellor will unveil that are going to be helpful for everyone’s finances. He may promise a spending spree, return free TV licences to the over 75s and scrap HS2.
But what we desperately need is an overhaul and simplification of tax and pension rules.
I lost hope that will ever happen a long time ago.
The pension system is a diabolical mess, best witnessed by the chaos over the NHS Pension Scheme.
So many policies have been added on top of one another that it makes financial planning a total disaster.
Not only that, but it chronically hampers aspiration, restricting people from building up pension pots to protect their own futures in retirement.
And then across the income tax system we have daft marginal rates brought about crackpot restrictions on allowances and benefits.
It is a mess – but no one has the stomach to tidy it up.
Brexit deflation
As we waited to get on the motorised train to take us to the beach while on holiday in Italy, we spotted a sign: due to safety reasons no large inflatables are allowed on the train.
So all us Brits diligently deflated our rings and lilos. The train arrives and on we get crammed in by the dozens of Italians and French who have not deflated theirs.
The driver just shrugged.
“This is why we have Brexit,” said son number one. Sometimes a 10-year-old manages to sum up what everyone else is thinking.
James Coney is money editor of The Sunday Times
@jimconey
