Tuesday, 29 September 2015

Record low ISAs

Returns on tax-free savings have fallen to record lows, according to the Bank of England.

The average interest rate for a cash ISA, or Individual Savings Account, dropped to 1.43 per cent in August.

It's the smallest reading since the Bank started calculated this average in 2011.

Returns from notice accounts, including ISAs, are at their lowest since records began in 1999.

Interest rates have been at rockbottom levels for 6 years, but banks and building societies have trimmed them even further in recent months.

Two weeks ago 400,000 savers with National Savings & Investments ISAs were told their rates would be cut from November.

Mortgage borrowers are benefiting from the same trend, with their interest costs also at the lowest level in recent records.

Monday, 28 September 2015

North/South house price divide

House prices in the South of England and East Anglia are pulling away from the rest of England and Wales again, according to the latest figures from the Land Registry.

Price increases are being driven forwards by London again, up 6.6 per cent year on year, the South East, up 7.6 per cent, and East Anglia, up 8.4 per cent.

But in the North West and the North East, along with Wales, prices were less than 1 per cent higher over the 12 months to August.

Prices actually fell in the North West, Yorkshire and the Humber and the East Midlands between July and August.

Previous figures from the Registers of Scotland showed that Scottish house prices were 3.5 per cent higher than a year before.

Wednesday, 16 September 2015

FCA unearths pension scams

The financial watchdog, the FCA, says its work monitoring the new pension freedoms has unearthed 5 scams affecting "multiple consumers".

Better-off pensioners appear to be most vulnerable to being scammed.

The watchdog's director of policy, Chris Woolard, told MPs that ten thousand people had filled in an online form asking for details of scam attempts since the freedoms were launched in April.

160 cases were sent for assessment by enforcement officers, of which 5 were now "ongoing operations".

Mr Woolard said the average scam involved losses of between £18,000 and £20,000 per investor.

"So far we've not seen evidence of a spike in scams overall," he added.

But scammers were turning their attention to pensions, now that the over-55s had the right to cash in their funds as and when they chose.

Criminals who had been concentrating on draining their victims bank accounts might now decide to transform themselves into fake pension providers.

Richer pensioners, who had already dabbled in the stockmarket and were more confident about investments, were in most danger of being duped by fraudsters.

Monday, 14 September 2015

Santander price hikes

Changes for Santander customers:

123 Current Account, monthly fee goes to £5 from £2

123 Credit Card annual fee rises to £36 from £24

123 Credit Card cashback reduced...
e.g. 1% on supermarket spend and 2% on department stores limited to £3 a month each

Affects 3.6 million current account customers, and 1.8 million with credit cards

Blow for credit card customers softened by temporary holiday from 2.95% foreign transaction charge

National Savings cuts rate

More than 400,000 National Savings customers will see their interest rates cut from mid-November.

National Savings & Investments will cut the rate on its tax-free ISA account by 0.25% to 1.25%, after finding itself with bumper inflows of cash.

The Direct ISA, with market-leading returns, had been attracting upwards of £800m a year from savers desperate to find a reasonable return, while taking advantage of a 100 per cent government guarantee.

Even more significant was the boost from the highly popular Pensioner Bonds and by the Premium Bond maximum limit going up to £50,000.

Jane Platt, Chief Executive, said it was a "difficult decision" but the institution had to "strike a balance between the needs of our savers, taxpayers and the stability of the broader financial services sector."

The cut will apply to £3.8 billion of savings from 16th November.

Wednesday, 9 September 2015

Help to Buy jump

Record numbers of buyers snapped up newly built homes in June, using the government's Help to Buy scheme.

The month saw 4,745 taking advantage of a state-provided interest free loan, provided under Help to Buy, to boost their deposits.

More than 3,800 of them were first time buyers, stepping onto the housing ladder.

Housebuilders have been cashing in, with Barratt Developments reporting a 45 per cent jump in profits this morning, to £565m.

Higher prices have been helping the builders as well: the price of the average Barratt home has risen by nearly 9 per cent in a year.

More than 56,000 buyers have completed purchases using Help to Buy Equity Loan scheme since it launched in April, 2013, on £12bn worth of homes.

A similar number have benefited from the scheme to assist buyers of older homes, called Help to Buy Mortgage Guarantee.

The Treasury put the total helped by various programmes so far at 120,000.

Monday, 7 September 2015

More pension scam calls

There's continuing concern about scams from the bodies charged by the government with giving guidance about the new pension freedoms.

The danger is that fraudsters pressurise the over-55s to withdraw cash from their pension schemes and sink it in dodgy investments.

Citizens Advice and The Pensions Advisory Service told MPs today that they were receiving more calls for help from people who said they were being targeted, though there is hope that public warnings are having some effect.

Rachael Badger, Head of Policy Research, Citizens Advice

We have seen a bit more of a growth in problems with scams, particularly around people aged over 55, since April.

And we are seeing more customers who are becoming repeat targets of scams.

And it's things like people are being asked by fraudsters to give access to their pension pots for high promised rates of return, options to invest in property abroad and fine wines, that sort of thing.

Michelle Cracknell, The Pensions Advisory Service (TPAS)

We are receiving more calls on our helpline about investment scams but we are receiving more calls before the event (being scammed) rather than after the event...so that's good news.