Likelihood of winning to decrease after NS&I cut the proportion of the total invested amount paid out in prizes
There was some bad news this week for Britain’s 22 million-strong army of premium bond holders: the odds of winning a prize are to get worse.
National Savings and Investments (NS&I) says it is cutting the proportion of the total invested amount paid out in prizes from 3.6% to 3.3% a year with effect from April’s draw.
Continue reading...Building societies fear consumers will be put off from saving if chancellor’s budget announces a 40% reduction
Rachel Reeves’s plan to slash the annual cash Isa limit by 40% could lead to higher mortgage rates and deter consumers from saving, finance bosses have said.
The chancellor is expected to cut the maximum amount people can put into tax-efficient cash individual savings accounts from £20,000 a year to £12,000 in Wednesday’s budget.
Continue reading...Treasury committee says move in November budget could push up mortgage rates instead
Cutting the annual cash Isa allowance will not encourage many savers to switch to shares but could push up mortgage costs, MPs have warned the chancellor.
Adults can put up to £20,000 a year in a tax-free Isa and spread the money between cash and stock market investments as they choose. In the 2023-24 tax year, 66% of all contributions went into cash savings.
Continue reading...Research finds it would take average worker saving all their earnings for 52 years to match wealth of richest 10th of society
It would take the average earner in the UK 52 years’ worth of earnings to become as wealthy as the richest 10%, according to new research by the Resolution Foundation.
In a new report, the influential thinktank analyses the Office for National Statistics’ latest wealth and assets survey, which covers the Covid pandemic period of 2020-22.
Continue reading...Revived body will examine future of the retirement system as analysis shows pensioner income is set to fall
The government is resurrecting the Pensions Commission, amid fears that a retirement crisis could mean today’s workers will be poorer in retirement than the current crop of pensioners.
The move by ministers to revive the landmark commission, established by Tony Blair’s government in 2002, comes as analysis shows that the income of pensioners is set to fall in the coming decades.
Continue reading...Committee says products may not be best use of public money and may have been mis-sold to people on certain benefits
Lifetime Isas could lead to savers making poor investment decisions and may not be the best use of public money, a cross-party committee of MPs has said.
In a report published on Monday, the Treasury select committee described rules which penalise benefit claimants as “nonsensical” and concluded that lifetime Isas, known as Lisas, may have been mis-sold to savers eligible for universal credit or housing benefit.
Continue reading...Digital bank hopes to tempt switchers with package including in-credit interest and fee-free travel spending
The battle for bank customers intensified this week, with a new player entering the UK current account market and offering cashback on bills and access to a savings account paying 7.1%.
Digital bank Zopa is hoping the perks – which also include in-credit interest and fee-free spending abroad – will tempt switchers to its first day-to-day account.
Continue reading...The Bank of England has voted to cut the cost of borrowing, reducing the base rate to 4.25%. Here’s what it means for you
The Bank of England has cut interest rates from 4.5% to 4.25%.
It follows two interest rate cuts in the second half of last year, and another one in February this year.
Continue reading...FCA to explore simplifying communications about savings accounts and review parts of its credit advertising rules
The City watchdog is considering changing rules to allow people to receive clearer information from financial firms to make it easier for them to find and compare products.
The Financial Conduct Authority (FCA) is exploring how it can simplify communications about savings accounts. The watchdog, which will announce its five-year strategy on Tuesday, will also review parts of its credit advertising rules, such as lengthy terms and conditions.
Continue reading...Research shows strong support for keeping tax-free accounts in their current form with £20,000 annual limit
A campaign to “save” cash Isas gathered pace this week, with research published showing strong support for the savings accounts.
However, data was also issued that investment firms said showed UK savers were “paying the price” for playing it safe because putting money into the stock market can generate much higher returns.
Continue reading...Claims management company expects claims over collapsed Neil Woodford fund to exceed £200m
More than 5,000 people who invested in Neil Woodford’s collapsed equity fund are suing Hargreaves Lansdown, claiming that the investment platform was still promoting the fund even when it was aware of its problems.
The number of people suing Hargreaves Lansdown, the UK’s largest investment site, has almost doubled in the past two years, according to the claims management firm RGL Management. Two years ago the number of people taking part stood at 2,750.
Continue reading...Pre-tax profits drop to £2.3bn between January and March, down from £2.6bn last year
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Profits at Barclays tumbled 12% in the first quarter, as higher UK interest rates weighed on demand for mortgages and loans and its investment bank was hit by a backdrop of economic uncertainty.
The UK bank said pre-tax profits fell to £2.3bn in the first quarter, down from £2.6bn last year, when it reported the strongest quarterly profit since 2011 after a string of interest rate hikes by the Bank of England.
Continue reading...Many best rates are easy access and notice options rather than ones that lock money away
This week’s news that inflation stayed steady at 4% in January means it is still possible to put your money in a savings account with an interest rate that beats the rising cost of living.
Returns on fixed-rate savings accounts have been falling, but, so far, variable rate deals have remained unchanged.
Continue reading...Resolution Foundation calls for auto-enrolment into saving schemes, as millions have no ‘rainy day’ fund
More than 11 million working-age people in Britain don’t have basic “rainy day” savings of at least £1,000, according to a report that warns that the poorest households are struggling to build up financial resilience amid the cost of living crisis.
The Resolution Foundation said people across Britain faced a “triple savings challenge” of insufficient savings, an inability to cope financially with major life events such as family breakdown, and inadequate retirement incomes.
Continue reading...While some banks and building societies scrap system, others report increase in usage by customers
While some banks are scrapping passbook savings accounts amid suggestions they are past their sell-by date, other providers have reported an increase in their usage as people turn to cash to help them manage the cost of living.
Newcastle building society said that in 2023 it issued about three times as many passbooks as it did in 2021, and that it is getting new customers on the back of decisions by rivals to axe them.
Continue reading...People who want to buy property costing more than £450,000 say they unfairly face losing money
Campaigners are pressing for changes to a UK government scheme for would-be first-time buyers that “fines” people if they use it to buy a home costing more than £450,000.
Martin Lewis, the founder of MoneySavingExpert.com, is among those calling for an urgent revamp of the rules that apply to lifetime Isas, which let people save for a first home or for their retirement.
Continue reading...NS&I, Shawbrook and Tandem among providers to make reductions amid flurry of such moves
Savers have been urged to act quickly if they want to get the best returns on their money after a flurry of interest rate cuts on top-paying accounts.
This week NS&I reduced the rate it offers on its three-year green bonds from 5.7% to 3.95%, while Shawbrook, Tandem and Ford Money were among other providers making cuts.
Continue reading...Higher interest rates and move away from cash isas means hundreds of thousands more people may be hit
Higher interest rates look set to land hundreds of thousands more people with an unwelcome tax bill for their savings, a financial advice firm warned this week.
A couple of years ago it was typically only the wealthiest with very big nest eggs who had to pay tax on their savings interest – but now someone with an emergency savings pot of about £8,000 could find themselves falling foul of this little-known tax trap.
Continue reading...Shortfalls fuelled by misconceptions and distrust of employers, as well as lack of spare income, figures show
A UK individual from a minority ethnic background typically has a pension pot less than half the size of that belonging to the average white British saver, data reveal.
The research from Legal & General’s investment arm claimed there was a sizeable “ethnicity pensions gap” in the UK that was being fuelled by “misconceptions” around pensions and a “significant distrust of employers”, as well as a lack of spare income.
Continue reading...Half have maximum of a month’s worth of rent put by as costs rise, Shelter survey finds
A third of working tenants in England do not have enough savings to pay rent if they lose their job, putting them at risk of losing their home, according to research by the housing charity Shelter.
Record rents and the rising cost of other household bills are putting tenants’ finances under pressure and mean many are unable to set money aside for emergencies.
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