nigel woollsey

Nigel Woollsey

Online Writer
Published: 27/01/2020

Shawbrook Bank has announced that it is cutting the number of buy-to-Let (BTL) deals that it offers down to three products. This follows the bank’s move from 10 BTL products down to seven in November 2019.

The three products now available are Single BTL, Complex BTL and Larger HMO (House of Multiple Occupancy). The Single BTL is suitable for property investors looking to borrow a maximum of £750,000. Those who need to borrow more than this sum, as well as those with a multiple property portfolio or small HMO, will be directed to the Complex BTL mortgage product. Finally, there is a dedicated BTL mortgage product for those who need to buy or refinance a property with seven or more tenants.

Shawbrook Bank has also adjusted its interest rates for these products, which now start at 3.25%.

2019 was a good year for the drawdown market, while those looking for an annuity saw the heaviest fall in annuity rates since 2012.

Data from the latest Moneyfacts UK Personal Pension Trends Treasury Report (which is being published later this week) found that during 2019, retirees in drawdown benefited from one of the strongest pension fund performance since 2016. In fact, the data shows that the average pension fund returned 14.4% during the year and that investors have now enjoyed positive fund growth in four out of the five calendar years since the introduction of pension freedoms in 2015.

By contrast, the average annual standard annuity income fell by between 8.5% and 9% last year (depending on the purchase price). This is the second-heaviest annual fall recorded by Moneyfacts, which is surpassed only by the falls of between 9.4% and 11.5% during 2012. Saying this, there was some optimism in the annuities market at the end of the year, as during the last three months of 2019 rising gilt yields enabled annuity providers to boost the average annuity income by between 4% and 4.6%.

Average annual pension fund returns and average annual annuity income change since the introduction of pension freedoms

Calendar year % pension fund growth % annual annuity income change
2019 14.4% -8.5%
2018 -6.2% -0.2%
2017 10.5% 1.0%
2016 15.7% -5.3%
2015 2.6% -3.1%

Annuity figures based on an annuitant aged 65 buying a single life level without guarantee annuity for a £10,000 purchase price. Source: Moneyfacts UK Personal Pension Trends Treasury Report/Lipper

Commenting on the data, Richard Eagling, head of pensions at Moneyfacts, said: “Another year of falling annuity rates makes it even more imperative that those seeking an annuity maximise the payments on offer. They need to pay attention to the annuity information prompts that providers must supply to consumers about how much they could gain from shopping around and switching provider before they buy an annuity.

“For drawdown investors, the performance of pension funds in 2019 may have boosted their drawdown pots but they still need to regularly review any income that they are taking to ensure it is sustainable. Now is not the time for complacency for any retirees.”

A Government report has revealed that the number of 25-34 year olds getting onto the property ladder has been on the rise since 2014.

Statistics released in the English Housing Survey show that the number of homeowners aged 25-34 has risen from 36% in 2013-14 to 41% in 2018-19. Meanwhile, the proportion of 25-34 year olds renting has fallen from its peak of 48% in 2013-14 to 41% in 2018-19.

While movement lower down the charts picked up this week, the mortgage sector overall continued to be slow, and there were no major changes at the tops of the charts. Saying this, the mortgage charts overall continue to be highly competitive, with low rates available across all charts.

Mortgage borrowers should be aware that when looking for the best deal, the lowest rate might not be the best option. Instead, borrowers should take into account a wide range of factors when choosing a mortgage deal, including product fees, incentives and flexible features.

This week Revolut hit the headlines with the launch of an easy access account paying 1.35% AER, but closer investigation into the account found that it was not as competitive as it first seemed. The account is only available to Revolut Metal customers, who pay £12.99 for the account. Fortunately for savers there are three easy access accounts available in the chart this week that match or beat this rate and which do not have any opening restrictions.

Savers looking to lock their money into a long-term bond this week will be disappointed to see that UBL UK reduced the rate on its five year fixed rate bond. This has resulted in the chart becoming less competitive, as new accounts take the top spots offering slightly lower rates.

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