People’s champion chairman says days of loyalty with banks are waning.

Call me old-fashioned, but I still believe that loyalty is important in life. It’s a two-way relationship that you nurture. If you looked after someone else’s interests then they would stick by your side. That was what banking was about when I started out in the Cowdenbeath branch in the 1960’s.

But, unfortunately, the big banks and financial services companies don’t see it this way anymore. There has been a massive erosion of such customer loyalty when it comes to banking and insurance. Most of the big institutions don’t seem to care about keeping hold of their loyal customers - preferring to make quicker profits by attracting new ones.

When I ran one of Scotland’s banks, I did offer our existing customers the chance of getting a better mortgage deal. I thought this was only fair. Today, this is increasingly unlikely. Instead we have institutions under pressure trying to make as much money out of us in the short-term before we wake up and smell the coffee. They even have a tag for those who now shop around - we’re called promiscuous. The loyal customers has paid through the nose with hidden fees and swingeing interest rates so banks can attract new business.

Recently the Bank of England’s monetary policy committee raised interest rates to 5.25% to curb our spending - and with inflation creeping up over 3% more rises look likely. It really is time to question your relationship with your bank, building society and financial services company. Are you getting the best deal - or are you paying for someone else’s cheap mortgage?

I believe we are developing a twin-track Britain. Those who regularly shop around and use a bit of time to find better deals on a range of items, such as mortgages, credit cards, insurance, loans and savings. These are the people getting the best deals. The rest - and many are those customers who have a sense of loyalty - are sitting on their hands, facing stiffer fees, extra charges and higher interest rates.

Those who are canny enough to be using the internet are winning, while those who still retain an out-of-date view about loyalty are being penalised. Those promiscuous consumers who are a minor risk can get good rates while those with poorer credit records end up paying higher interest and this can push them further into the debt spiral.

While I would encourage everyone to look around to get a better deal, I’d also like to see the return of loyalty. I’d welcome the big banks and insurance companies offering great deals to those who have been with them for a long time and stuck with the business. But I’m not sure this will ever happen on a major scale - so consumers need to get smarter.

For instance, with interest rates expected to rise again this year there are still a few good fixed-rate mortgages available. Alternatively, you could look for a discounted rate, this might get you over the higher rate hump during the next 18 months. Consolidating all your credit card debts onto your mortgage at a much lower rate of interest remains a sensible solution for those who have been over-spending and want to get their finances back under control.

Don’t feel guilty about being disloyal - it’s OK to move. It’s a rational decision to make sure that you are not paying for someone else’s cheaper credit.

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