Just walk away from bad savings rates

If you have not checked the rate you are earning on savings, do it now. You will probably get a nasty shock.

Many banks and building societies are slashing interest by more than the recent cut in bank base rate and, as our lead feature shows, a huge proportion of accounts are paying negative returns once inflation and tax are stripped away.

Savings institutions are proving adept at weaseling their way around Banking Code measures that aim to protect savers from being left stranded in accounts paying barely visible returns.

We will shortly see a fresh tightening up by the Banking Code Standards Board but the best sanction is for more savers to simply walk away from lousy accounts.

Intervention by the Financial Services Authority to force pension companies to encourage shopping around for annuities is welcome.

It could promote competition, but this is not certain, given that insurers don't always want to take on fresh annuity business. There are still fundamental problems to be resolved in the architecture of the pension system.

A group of thinkers in the pension business are raising funds from the life insurance industry to support a foundation to study the options. A specialist pensions think tank will have no difficulty coming up with ideas. The problem will be in persuading the Government to listen.

More agony for Equitable Life policyholders. They are unlikely to be presented with a compromise deal to cap the company's liabilities until mid September. The insurer is waiting, it says, for legal opinion on possible mis-selling claims.

Policyholders must be wondering if the management has wind of more bad news, though Equitable says it does not have the legal report yet. A meeting between policyholder action groups and Equitable management last week appears to have resulted in a new mood of cooperation. Equitable's management is certainly on a charm offensive to try to persuade conflicting interest groups to accept a deal that would cap its liabilities.

If a deal is struck, policyholders, regulators and others scrutinising the Equitable affair must question why such an agreement could not have been brokered long before the insurer hit the rocks.