Liz Hodgkinson

I've been saying it for years and now it seems they're finally listening -- not to me, but to sense. Banks must be broken up into retail and investment areas which are quite separate from each other and never overlap. It can't be right that banks gamble with our money. We deposit our wages and savings into bank accounts because, quite simply, there is nowhere else to put them. In the old days you could get paid in cash or keep your money under the mattress but those days are long over. Everybody has to have some kind of bank account, even people on benefits. It's easy to see why; it's so the government can keep a check on how much money everybody has got and what they do with it, for tax purposes. Most of us don't have enough money or enough nous, to be able to circumvent the tax system.

Given this, there needs to be a radical overhaul of the banking system and not simply because of the financial crisis brought about by reckless gambling and risk-taking among bankers. We need to know that the money we deposit is safe, that a certain level of interest is guaranteed, that our pensions won't melt away and that we won't be charged huge rates if we have to borrow. We need to simplify the high street banking system right down so that it becomes reliable, honest and trustworthy. I would like to see an end to all the misleading ads -- 'helpful banking' 'together' and so on, giving the impression that they are trying to give us money rather than what they are actually doing, which is taking it away.

In common with many other people, I used to be financially comfortable. I had saved prudently for my old age and by downsizing, had accrued enough capital to live on. No longer. Because interest rates came down to 0.5%, what I had thought was a reasonable safety net, completely disappeared. Again in common with many other people, I had worked hard all my life, privately educated two children, never been on the dole or claimed any benefits and, apart from two short stays in a maternity hospital, have never been ill, never taken any medication, never had any operations and in fact, have not cost the NHS or the state education system a single penny. Nor have any of my family ever used the NHS or, come to that, had private treatment either.
I'm not exactly out on the street, but the antics of the banks have meant that I have had to think again about what to do with the money that used to provide an income. It's no good telling me to tie up my money for five years to get 3.5% interest -- way below inflation and if you can't touch it for five years, what good is it? In any case, interest rates will probably go up inside five years and you are still stuck with your five year bond.

What should happen is that the high street banks should revert to being modern versions of building societies, not run for profit but for mutual benefit. They should pay out a reasonable, guaranteed rate of interest to savers and lend to borrowers at a slightly higher rate, to meet running costs. All bank staff would be paid a reasonable wage and managers and overseers would get slightly more, but not 40 times as much as entry level staff. Such banks would not be allowed to sell products which could cause a loss, such as stocks and shares ISAs. When depositing money you would know it was safe, that you were guaranteed the rate of interest advertised when you deposited, and no bonds would be for more than a year for those over 18.

Most people who put money into banks are not financial experts and do not understand what is meant by risk. The small print perhaps explains it but the big print sells the product, and simple, unsophisticated people are taken in.

Those who want to gamble with their money can use the investment banks. On the whole, these will be more financially sophisticated people who understand international financial markets and how they can fluctuate; they are also people who are prepared to take a risk with stocks and shares. Most people, though, are not like that. They just want something they can understand, which pays them a fair rate of interest and which enables them to calculate their income both present and future.

Although money will always be volatile and where large sums are concerned there will always be chancers and rogues, surely we can institute a system which is completely honest, above board, which is not hyped so as to dupe the simple-minded and which can be trusted? Now that so many UK banks are nationalised, or virtually so, surely now is the time to bring in a completely different system? Because so many of us find money matters boring, we have left it to those who don't find it boring and who are always looking for ways to take money off the innocent and trusting. We cannot leave our money, our livelihoods, our financial futures, to the fat cats. They only want the cream for themselves; it never trickles down.

And while we're at it, abolish inheritance tax so that we can leave money to our children and grandchildren without paying ridiculous amounts in yearly premiums to 'shelter' it from the taxman; at present, the only way to avoid our executors paying huge sums in IHT and, in many cases, having to borrow at high rates of interest because there is not enough liquid in a bank account to pay the 40% over £325,000, the current threshold.