Top Money News

nigel woollsey

Nigel Woollsey

Online Writer
Published: 09/07/2019

As we launch into the second half of 2019, consumers who are planning take out a mortgage, a savings deal or a credit card may wish to know if they are better or worse off than if they had taken out a deal in January.

Indeed, the latest research from Moneyfacts.co.uk reveals that consumers hunting down a mortgage deal appear to be the current winners over the past six months, as lenders have cut rates to entice new borrowers. Our data shows that the average two, five and 10-year fixed mortgage rates have fallen since January.

However, savers may feel less enthused by 2019 so far, as interest rates on savings products have fallen on average, despite some marginal improvement to the top rates offered on one and five-year fixed bonds. This could increase apathy among savers who feel there is little reason to switch deals.

Meanwhile, customers who decide to take out an interest-free credit card today seem to be the biggest losers overall, as they now have less time to repay debts before interest applies compared to January. This reduction in interest-free terms could mean that borrowers are forced to increase their monthly repayments, or that they will need to switch deals sooner than planned to avoid interest being charged on their debt.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said “The past six months of 2019 have flown by, so consumers may want to take stock on whether they could now get a better mortgage, savings or credit card deal – or even more broadly improve their personal finances. While there hasn’t been a Bank of England base rate change this year so far, this doesn’t mean interest rates and offers have remained unchanged – it’s always important to review finances at least every six months.”

Mortgage market analysis

 

Jul 2018

Jan 2019

Jul 2019

Average two-year fixed rate

2.52%

2.52%

2.49%

Average five-year fixed rate

2.93%

2.94%

2.85%

Average 10-year fixed rate

3.13%

3.05%

3.01%

Source: Moneyfacts.co.uk

Commenting on the mortgage market, Rachel Springall said "Borrowers could find better deals today than six months ago, but whether rate competition will last is becoming less certain. As we step into the second half of 2019, lenders may well tighten the reins of their rate pricing amid market scrutiny, economic uncertainties and volatile SWAP rates. Consumers would therefore be wise to consider fixing their mortgage soon to take advance of the deals on offer, with interest rates starting as low as 1.35% for a two-year fixed deal (Halifax). In fact, average rates on both five-year and decade-long fixed deals have dropped over the past six months too.

“Potential first-time buyers may want to keep a close eye on their finances and be mindful that as both house prices and the cost of rent is on the rise in the UK, their dream of getting onto the property ladder may be further away than first thought. Still, it is important that lenders make every effort to entice these prospective borrowers responsibly and tailor their range to meet demand.

“While interest rates are a convenient measure to compare deals, it is important that borrowers consider a mortgage based on the overall true cost, particularly to save on any upfront fees. Seeking out independent financial advice is a good idea to navigate the mortgage minefield.”

 

Savings market analysis

 

Jul 2018

Jan 2019

Jul 2019

Average easy access rate

0.51%

0.64%

0.63%

Average one-year fixed bond rate

1.32%

1.45%

1.44%

Average five-year fixed bond rate

2.13%

2.15%

2.08%

Source: Moneyfacts.co.uk

With regards to the savings market, Rachel Springall, said “Savers still have some decent deals to choose from, but there has been little change based on the average rates across easy access accounts to encourage savers to switch. Over the first half of this year, there has been no change to the top rate offered on easy access accounts (1.50%), plus any saver looking to invest in a fixed bond will find only marginal improvements to the top one and five-year fixed bonds. The top rates have increased by just 0.10% and 0.05% respectively (today BLME offers 2.20% on its one-year fixed bond and Gatehouse Bank offer 2.75% on its five-year bond – both expected profit rates), however average rates are down across all three areas.

“Statistics released by the Office of National Statistics stated that the average household savings ratio is falling and a separate survey from Yorkshire Building Society reported that more than one in four consumers don’t have enough savings to last them a month if they lost their main source of income. More worryingly, one in six have no savings at all.

“Amid economic uncertainties, it is imperative that consumers put aside what they can afford and ideally aim to cover at least three to six months of essential outgoings.”

 

Credit card market analysis

 

Jul 2018

Jan 2019

Jul 2019

Average interest-free balance transfer term (days)

598

564

539

Average interest-free purchase term (days)

366

354

331

Average introductory balance transfer fee

2.15%

2.32%

2.21%

Source: Moneyfacts.co.uk

Speaking about the credit card market, Rachel Springall said "The lengthy terms offered on interest-free credit cards have continued to diminish in the past six months, carrying on from the falls seen in the last half of 2018. On balance transfer cards, borrowers have 25 days less on average to pay back their debt before interest applies than they did in January, while based on the longest term today versus six months ago, there is a difference of four months.

“Indeed, MBNA offers a 29-month interest-free balance transfer card today with a 2.75% fee, but six months ago they topped the market with a 33-month deal with a 1.99% fee. This means that borrowers today need to pay an additional £12 a month to clear a core debt of £3,000 within 29 months, compared to if they had grabbed the 33-month offer – plus they would pay £22.80 more in upfront fees.

“The average balance transfer fee overall may have fallen in the past six months, but it is up year-on-year, and while the upfront cost to transfer debt has fallen since January, borrowers are still facing a shorter timeframe to pay debts before interest applies.”

“Whether a borrower or a saver, the next few months may well stir up concerns – so if they haven’t already, it’s time for consumers to review their personal finances and switch to a more competitive deal to help brave any economic storm.”

Consumers who believe that they may qualify for compensation after being wrongly sold payment protection insurance (PPI) are being urged to act before the hard deadline for claims on 29 August 2019. With just 10 weeks remaining, the Financial Conduct Authority (FCA) has launched a new series of multimedia adverts designed to motivate those who may still be eligible to make a claim before it’s too late.

It is thought that millions of UK consumers were mis-sold PPI when taking out a range of financial products, including loans, credit cards and mortgages. The point of PPI was that if you had taken out the cover and then couldn’t work – through illness or redundancy – then some or all of your credit repayments would be covered. However, problems arose due to mis-selling this product to people who:

• Indicated they did not want to take out PPI, but this was still included in their repayment costs
• Had no need of PPI
• Were wrongly advised that if they didn’t take PPI then their credit application would be refused
• Took out PPI that had been incorrectly explained to them or where the product was not suitable for them.

The campaign comes as FCA figures released this week, show the regulator has had more than 3.9m users access the PPI website and 44,000 calls to its dedicated contact centre. On top of that, a total of £334.3m was paid in April 2019 to customers who complained about the way they were sold PPI. This takes the amount paid since January 2011 to £35.3bn.

As part of this final leg of the campaign, the FCA has recruited its own ‘Pressure’s on Panel’ of ambassadors. The panel features 90s-icon, Mr Motivator, partners such as the Money and Pensions Service, personal finance expert Sarah Pennells, and expert bloggers like Skint Dad.

Emma Stranack, FCA’s PPI Deadline Campaign Lead, said: “With just over 10 weeks to go, time is running out to claim back money for PPI. Simply put, if you haven’t complained to your provider by 29 August 2019, you won’t be able to claim money back for PPI – so you should make your decision as soon as possible. Checking if you had PPI is simple and free. Don’t worry about paperwork, you only need your date of birth and relevant previous addresses. Search FCA PPI or call 0800 101 88 00 to find out how.”

Personal finance expert and consumer champion, Sarah Pennells, echoed this, adding: “Now is the time to contact your bank, loan or card company as soon as possible. You can complain to them directly for free and you can use the FCA’s website for more information. You don’t have to use a claims management company as providers are supposed to make sure that complaining about PPI is straightforward.”

Consumers who haven’t complained to their provider by 29 August 2019 won’t be able to claim money back for PPI.

As of today, certain banks and building societies have signed to up a new voluntary agreement to refund the victims of fraud – especially those scams known as authorised push payment cons.

Last year some 84,000 people lost a total of £354m to criminals – many of these cases involved individuals losing tens of thousands of pounds to the con artists. In the same period, just £83m was refunded to customers – heaping more misery on top of the loss of what is often a victim’s life savings.

However, the new voluntary agreement will look to banks to judge each case by a new set of criteria, by which customers who have taken reasonable care or who can demonstrate an element of vulnerability will be refunded in full if they become the target of authorised push payment scams.

A warning has been issued today by the Financial Conduct Authority (FCA) together with Action Fraud regarding the rising number of crypto assets and forex investment scams. Reports of this kind of criminal activity tripled last year to over 1,800 recorded instances, with more than £27m lost to scams of this nature in 2018/19. However, in an alarming new trend, fraudsters are using bogus celebrity endorsements in order to dupe unwary investors into parting with their cash.

 

Social media platforms are being increasingly used to promote ‘too good to be true’ online trading platforms, accompanied by images of high-cost, luxury items, such as expensive watches and cars. Once an innocent investor has been enticed into clicking on a web link, they will be taken to a professional-looking website where they will be encouraged to invest. At first, the customer is assured by the fact that the first investment has made a profit, before the scammers then approach the victim to invest yet more funds as well as introducing friends and family to the bogus scheme. Eventually, however the returns stop, the account is closed without warning and the criminals disappear with the victim’s money. It has been estimated that the average loss due to this kind of fraud is around £14,600 per victim.

 

The introduction of fake celebrity endorsements is a relatively new development that has added an additional lure for the unwary on social media platforms. This is a ploy designed with the sole intention of lending credibility to the scammer’s offers.

 

Pauline Smith, director of Action Fraud, said: “People need to be wary of fake investments on online trading platforms. It’s vital that people carry out the necessary checks to ensure that an investment they’re considering is legitimate.

“Action Fraud is pleased to be partnering with the FCA to raise awareness of online trading scams, and we hope it will help prevent more people falling victim. Remember, if you think you have been a victim, contact Action Fraud.”

 

This advice was echoed by Mark Stewart, executive director of Enforcement and Market Oversight for the FCA: “'We’re warning the public to be suspicious of adverts that promise high returns from online trading platforms.

“Scammers can be very convincing, so always do your own research into any firm you are considering investing with to make sure that they are the real deal. Before investing online, find out how to protect yourself from scams by visiting the ScamSmart website, and if in any doubt – don’t invest.”

 

The FCA has also produced a simple series of rules for would-be investors encouraging people to stay safe while scrolling:

  • Don’t assume it’s real – professional-looking websites, adverts or social media posts don’t always mean that an investment opportunity is genuine. Criminals can use the names of well-known brands or individuals to make their scams appear legitimate.
  • Stay in control – avoid uninvited investment offers whether made on social media or over the phone. If you’re thinking about making an investment, thoroughly research the company first and consider getting independent advice.
  • Make the right checks – firms providing regulated financial services must be authorised by the FCA. You can check whether they are authorised on the Financial Services Register. Use the contact details on the Register, not the details the firm gives you, to avoid ‘clones’.
  • Every report matters – if you have been a victim of fraud or cybercrime, report it to Action Fraud.

 

Moneyfacts.co.uk also has a number of helpful online guides, which can help you steer clear of online financial scams as well as ideas on how to keep your online banking safe.

You may have the best intentions of saving up money – perhaps your countdown to Christmas has started, or maybe you've started planning next year's holiday – but it can be hard to find the time to sit down and really take charge of your finances. That's why Moneyfacts.co.uk finance expert Rachel Springall has come up with seven top tips to save money using only your smartphone.

1. Start with the basics

Even if you have just £50 to put aside, it's a good idea to open an easy access savings account as this will reduce the temptation for you to spend that cash. Many of the top-paying easy access accounts are online-only, which means you should be able to get an emergency pot going easily enough via a browser or proprietary smartphone app.

"Starting a savings pot can be done in just a few minutes online, and today some of the best easy access accounts are online-exclusive," said Rachel. "Easy access accounts overall are improving, as the average rate of 0.63% is the highest seen since February 2016 when it was also 0.63%, so they are worth reviewing."

2. Make sure loyalty pays

While many may feel reluctant to give a store their personal details, some loyalty programmes can certainly be worth it. With free cash, discounts or presents on offer, loyalty can pay out, and now with technology to help, you wouldn't even need to lug around a whole bundle of loyalty cards.

Rachel tested one of these "free and simple ways to have these cards at the ready, in the form of the Stocard app. It scans each barcode on your loyalty cards and logs them so you can access all your cards quickly using only your mobile phone." If you remember to take your mobile phone with you, you could quickly and easily save up enough for a free coffee or discounted shopping experience.

3. Cashback is your friend

You don't need to switch current accounts to get some welcome cashback for your spending. "Cashback websites have boomed in recent years and it's easy to see why," Rachel explains. These sites, which are often free to sign up to, allow customers to earn something back every time they make a purchase.

"As there is less than three months to go until Christmas, shoppers may as well try to earn a bit of cashback when buying gifts," added Rachel, with most of these sites such as Quidco and TopCashback now offering cashback from thousands of different brands through their own mobile apps.

4. Don't forget about vouchers

The days are long gone when you had to rely on cutting out vouchers from your local newspaper. If you find yourself out and about considering a purchase or eatery, you can use sites such as Groupon or VoucherCodes to see whether you'd be able to get a discount – no scissors required.

"Consumers don't necessarily have to go into a store to pick up vouchers or find out about discounts these days; in fact, shoppers can gain access to thousands of vouchers and deals online for free, or even at the touch of a button via a mobile app," said Rachel. "Sites like Groupon and VoucherCodes allow shoppers to earn an array of cashback or discounts and even help them save cash on home delivery, and it doesn't cost a penny to download the apps."

5. Flexible savings to the rescue

Not everyone wants to put away the same amount every month into a savings account; especially those with a variable income would be reluctant to set up a standing order to their savings pot. However, that has traditionally meant remembering to transfer the money manually each month.

Thankfully, there are now several smartphone apps that can help people who don't want the hassle of remembering to save. One example is Chip, a free app that automatically puts away a flexible amount of cash every few days. "Chip works out how much money users could save and sends a text message as a notification before transferring the cash to a separate pot," Rachel explains. "Users can even see how long it would take them to save towards a certain goal, making it effortless to start building a savings fund."

6. Save your change, but digitally

A well-known savings trick is to put aside your loose change throughout the year and then deposit the whole lot into a savings account for a welcome savings boost. With the advent of contactless and fewer people now using cash to make purchases, this trick may be falling into disuse, but Lloyds Bank has come up with an alternative.

"Customers can 'Save the Change' using their Lloyds Bank current account to grow their savings," Rachel has found. "When customers are in credit, a single purchase is rounded up to the nearest pound, with the difference transferred into a separate account by signing up online. Bit by bit these transactions can build up over time; if a purchase for £1.25 is made, Lloyds will transfer 75p into their savings account, which could see them save £5.25 in a week if this is spent every day."

7. Budgeting made easy

Even if you don't want to automate the savings process, you might want some help figuring out where you can save. Instead of going through all your outgoings manually, there are now apps that can go through your financial statements for you and point out where you could make some cuts.

One of these apps, highlighted by Rachel, is Money Dashboard, which allows customers to "determine what spare cash is left to put towards a specific savings goal," among other things.

What next?

Even if none of these tips or apps sound exactly like the one for you, there's a good chance that if you are looking for something specific to help you save money, there's an app for that. To get the best interest rate on any type of savings account, however, you may still want to refer to the Best Buy charts, as by the time you read this it might be the case that the top-paying account isn't an online-only product.

­

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