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...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...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...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...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...Government-backed NS&I increases its rates, as building societies and banks launch better deals
Amid the mortgage misery, there was more good news this week on savings rates, with a growing number of accounts now paying 6%-plus interest.
Meanwhile, the government-backed NS&I – a favourite of many in these uncertain times – has upped the rates on some of its popular fixed-rate accounts.
Continue reading...Financial Conduct Authority to meet executives on Thursday as part of its investigation into savings market
UK bank bosses have been summoned to a meeting with the financial watchdog this week amid mounting concerns that they are profiting from rising interest rates by offering paltry savings rates to customers.
Executives from the big high street names Lloyds Banking Group, NatWest, HSBC and Barclays, as well as from smaller lenders, are due to attend a meeting at the Financial Conduct Authority (FCA) on Thursday to discuss concerns that savings rates are lagging far behind the soaring costs of mortgages and loans.
Continue reading...Rises of up to 0.75 percentage points follow increases at First Direct
Customers of HSBC will receive a boost to their savings after the bank announced an increase to interest rates, as Britons enjoy some of the highest rates in more than a decade.
The lender is increasing rates on some of its savings accounts, with increases of up to 0.75 percentage points.
Continue reading...From building up a nest egg by earning interest on small change, to using an app for budgeting
There is no point trying to save if you are burdened by costly debts.
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