Interest rates for savings accounts are finally beginning to rise, says an independent financial information website. However, so called easy access accounts are, in fact, becoming less easy to access.
According to new research by Moneyfacts, average interest rates on the most popular ten savings accounts has risen to 1.49 per cent, up from 1.39 per cent twelve months ago.
But Moneyfacts found that some of the providers of these savings accounts are limiting their customers’ access to their money. Some limit savers to withdrawing their money just three times a year.
Moneyfacts suggests that these providers are investigated by the Financial Conduct Authority, (FCA).
Financial expert at Moneyfacts, Charlotte Nelson, said that the small rate increase ‘restores hope’ to savers but that many savers will be disappointed to see that their providers are limiting the number of times they can withdraw their own funds. Virgin Money, for example, only allows savers to take out their savings three times during a twelve month period as does Chelsea Building Society. The Nationwide permits five withdrawals per year.
The FCA found earlier this year that moving savings from one provider to another can be difficult and that only 20 per cent of easy access savings accounts had been switched from one provider to another during the previous twelve months.
In its report published in January of this year, the financial watchdog said that savers should be given more information and that the process of moving their money from one savings provider to another should be more straightforward. It proposed a series of measures to make switching savings accounts easier and to force providers to state their interest rates clearly in summary boxes on statements. The FCA will also publish details of firms offering the lowest interest rates on its own website.
The government has been accused of failing to build sufficient new houses by the Royal Institution of Chartered Surveyors, (RICS) and should be doing much more to address the housing shortage in the UK.
In RICS’s most recent survey, it found that the quantity of homes for sale has sunk to its lowest on record.
Consequently, demand for homes continues to outstrip supply, pushing house prices ever higher. RICS predicts that the coming months will see ‘sizeable gains’ in house values.
The government replied that more homes are being built, especially on sites that have already been built on: brownfield sites.
RICS found that the demand for homes is rising rapidly, more quickly than it has done in the past eighteen months. The sum total of houses for sale, however, has dropped to its lowest ever, just 47 houses or flats per surveyor this July.
Head of policy at RICS, Jeremy Blackburn, said that the government has been increasing demand for housing through its housing initiatives, such as the Right to Buy scheme, but has failed to address ‘the real issue’ – that of the supply of homes. He called for a co-ordinated and coherent house building policy. The National Association of Estate Agents demanded that the government adopt a similar strategy last month.
The government has recently extended its Right to Buy programme to include housing association homes and introduced the Starter Homes Initiative, which allows young people to buy their first home at a 20 per cent discount. Part of the Help to Buy scheme has also been extended until 2020.
The government’s response to RICS’s accusations was that it has been responsible for the building of more than 260,000 low cost homes since 2010 and that it is committed to building a further 275,000 over the next five years, the fastest rate for two decades.
House prices are falling sharply in parts of London but rising rapidly in the North East, according to the property website, Rightmove.
Prices have fallen most steeply in Kensington and Chelsea, where the average asking price of a property is now £178,000 less than it was in June, a drop of 7.2 per cent. The north east of England has seen asking prices increase, however, by 2.1 per cent in just one month. The average asking price in Kensington and Chelsea is £2.29 million and £147,251 in the north east.
The south east and the south west of England and the West Midlands also saw house prices fall during July, says Rightmove.
House prices have risen most in London over the last twelve months, increasing by 7.8 per cent. The largest drop has been in Wales, where prices are 1.7 per cent lower than they were in July 2014. However, London house prices vary vastly depending on the area. For example, prices in previously unpopular places, such as Waltham Forest, Redbridge, Merton and Hillingdon, have increased by as much as 15 per cent during the last year but prices in more expensive areas, such as Richmond, Fulham and Islington, have remained static.
The average price for all of England and Wales rose slightly during July, up by just 0.1 per cent, to £294,592.
Rightmove also reported that the number of properties for sale has dropped by more than 10 per cent in comparison with this time last year. Homes that are suitable for first time buyers with one or two bedrooms are in particularly short supply. What is more, these properties are often bought by buy to let investors, making the number available to younger people wishing to get onto the housing ladder even smaller.
The Bank of England may have decided yet again to keep interest rates at their current record low of 0.5 per cent during the most recent meeting of its Monetary Policy Committee (MPC), but it is becoming increasingly clear that the days of very low rate fixed mortgage deals are coming to an end. Thirty six banks and building societies increased their rates during July, with many more set to do so over the coming months.
During the last four weeks, average interest rates on a two year fixed rate mortgage with a 40 per cent deposit have increased from 1.81 per cent to 1.86 per cent. A five year fixed rate deal has risen to 2.59 per cent from 2.54 per cent.
The MPC voted 8 to 1 to keep interest rates at 0.5 per cent at the beginning of August but this was the first time that the vote has not been unanimous for months. The Governor of the Bank of England, Mark Carney, has already said that the time for a rate increase is drawing closer.
However, the vote came as a surprise to some economic analysts, who had been predicting two or three MPC members would vote against a rate rise.
The Bank said in its most recent Inflation Report that the outlook for inflation is muted due to the collapsing Chinese stock market and the continuing debate surrounding Greece’s financial woes.
The Bank hopes that inflation will rise to 2 per cent by 2017. Inflation is currently just 0.2 per cent and forecast to rise to 0.4 per cent by the end of September. This is due largely to the low price of oil and the rise in the value of sterling which, the Bank estimates, has increased by 3.5 per cent since May.
Super rich men and women from around the world are failing to pay at least $21 trillion in taxes, more than the entire American economy, according to new research from the campaign group, Tax Justice Network.
James Henry, from Tax Justice Network, and previously a chief economist at consultancy, McKinsey, conducted the research based on data from the International Monetary Fund and the Bank for International Settlements.
His report shows that tax avoidance schemes, such as that used by comedian Jimmy Carr last year, are just the tip of the iceberg. Carr used a trust based in the Cayman Islands to cut the amount of tax he paid but, according to the report, many of the world’s super rich are hiding some or all of their assets off shore, despite the efforts of many leading economies to tackle tax evasion.
The report shows, says John Christensen from Tax Justice Network, that inequality is much greater than government statistics indicate. Politicians rely on the trickle-down effect to transfer some of the wealth held by the rich to poorer members of society. However, the report indicates that, in fact, vast amounts of wealth are actually flowing out of the country and into off shore accounts.
James Henry estimates that more than $21 trillion (£13 trillion) is held in off shore accounts, possibly as much as $32 trillion (£20 trillion). Half of that is owned by just 92,000 people.
According to Henry, if these super rich tax evaders could be persuaded to reinvest their wealth back in their home countries, much of the wealth could be used to tackle many of the challenges faced by economies today. For example, taxing the super-rich citizens of Europe could, potentially, end the Eurozone’s debt crisis. African economies, such as those of Nigeria and Ivory Coast, could also drag themselves out of the indebtedness they currently face.
Supermarkets are deliberately misleading their customers with confusing promotions, says the Competition and Markets Authority, (CMA).
Following a three month study, the competition regulator found evidence that some supermarkets could be breaking the consumer law.
The CMA investigation was triggered by a complaint from Which? the consumer group. Their ‘super complaint’ accused the supermarket industry of confusing and deliberately misleading price tactics in hundreds of cases. However, the CMA said that although they had found some examples, the problem was not as widespread as Which believed.
The supermarket industry responded to the investigation by saying that most pricing promotions represented good value for money for consumers.
The CMA is to continue its investigation and has said that some supermarkets will be fined for their failure to comply with consumer law.
During the three month study, the CMA found that 800 of 150,000 products displayed prices that could mislead. For example, some products showed a discounted price and compared this to the old, non-discounted price, but this is only allowed if the product has been at the discounted price for a shorter time than at the higher price. In a number of cases, the CMA found that supermarkets were not adhering to this regulation.
Furthermore, some supermarkets did not always display how much the product cost per gram or per litre clearly or did not use like with like, making it difficult for the consumer to compare products.
Examples from the Which? complaint
Which? found that Pepsi Max was sold for £1.98 for 28 days and then sold at £1 for 63 days with a promotion, saying that it had been reduced from £1.98, although it had been on sale at that price for a far shorter time than at £1.
The price of tomato ketchup is sometimes given per 100g or 100 ml, making it less simple to compare prices.
House prices are falling sharply in parts of London but rising rapidly in the North East, according to the property website, Rightmove.
Prices have fallen most steeply in Kensington and Chelsea, where the average asking price of a property is now £178,000 less than it was in June, a drop of 7.2 per cent. The north east of England has seen asking prices increase, however, by 2.1 per cent in just one month. The average asking price in Kensington and Chelsea is £2.29 million and £147,251 in the north east.
The south east and the south west of England and the West Midlands also saw house prices fall during July, says Rightmove.
House prices have risen most in London over the last twelve months, increasing by 7.8 per cent. The largest drop has been in Wales, where prices are 1.7 per cent lower than they were in July 2014. However, London house prices vary vastly depending on the area. For example, prices in previously unpopular places, such as Waltham Forest, Redbridge, Merton and Hillingdon, have increased by as much as 15 per cent during the last year but prices in more expensive areas, such as Richmond, Fulham and Islington, have remained static.
The average price for all of England and Wales rose slightly during July, up by just 0.1 per cent, to £294,592.
Rightmove also reported that the number of properties for sale has dropped by more than 10 per cent in comparison with this time last year. Homes that are suitable for first time buyers with one or two bedrooms are in particularly short supply. What is more, these properties are often bought by buy to let investors, making the number available to younger people wishing to get onto the housing ladder even smaller.
The number of UK citizens declared insolvent is lower than it has been for ten years, according to figures released by the Insolvency Service.
18,866 people were declared insolvent during the second quarter of this year in England and Wales, 29.3 per cent less than during the same period in 2014 and the lowest figure since July to September 2005, nearly ten years previously.
The Insolvency Service also reported that the number of companies going bankrupt is at its lowest rate for over seven years. A total of 3,908 businesses failed between April and June of this year, the smallest number since the last quarter of 2007.
Financial experts declared that the drop in insolvency figures is due to the strengthening economy and recent real term increases in salaries.
Philip Sykes, president of insolvency trade body, R3, said that now that wages are rising faster than inflation once more, people are in a better position to pay off their debts without having to declare themselves insolvent.
The drop in personal insolvencies has been welcomed by the organisation that runs the National Debtline, the Money Advice Trust, MAT. However, it expressed concern that the recent cuts to tax credits will push some households further into debt, forcing them to turn to expensive credit providers to boost their budgets.
The number of people borrowing a mortgage to buy a home rose during June, when 66,582 new mortgages were taken out, just 1,469 fewer than in April, the most recent peak month.
Lending to businesses fell, however, by as much as £5.5 billion, raising serious concerns about economic investment, according to Howard Archer, chief economist at IHS Global Insight.
The Office for Budget Responsibility has predicted that household debt will increase to 169 per cent of household income within the next five years.
An independent research institute has found that many of those who claim tax credits will be worse off by up to £1,000 per year, following the recent budget.
The Institute for Fiscal Studies has said that the living wage announced by Chancellor George Osborne will not compensate those on low incomes for the cuts made to their tax credits.
Analysing the budget, the IFS called it ‘regressive,’ saying that it took far more from the poor than it did from the rich. IFS director, Paul Johnson, stated that it was unequivocal that tax credit claimants would be worse off following the cuts announced in the budget.
The amount people can earn before their benefits are withdrawn has also been lowered in changes to Universal Credit. Around 3 million families will be affected who will be, on average, £1,000 a year worse off. Johnson said that Universal Credit was intended to give benefits claimants an incentive to work and that this incentive has been reduced.
13 million households will be £5 a week worse off because of the extended freeze in benefits for those adults under the age of 65, as well as local housing allowances and tax credits until 2020.
Whilst the minimum wage has been increased, this means that earnings will increase by an extra £4 billion in total but changes to the cuts to the welfare system account for £12 billion. Paul Johnson said that as a result, there are bound to be more losers than winners.
The budget also included around £14 billion tax increases, offset by £8 billion tax give aways. The minimum wage is to be raised to £9 a hour for the over 25s by 2020, but Johnson described this as a gamble saying that the only way to guarantee higher wages is to increase productivity.
Economic growth in the UK rose by 0.7 per cent during the second quarter of 2015, official figures from the Office for National Statistics (ONS) show.
The rise is, in part, due to a sharp increase in gas and oil production and this is the tenth consecutive quarter that has seen the economy grow.
Living standards are also returning to their pre-economic crisis levels, according to the ONS, with the GDP now ‘broadly in line’ with its level in 2008, just before the UK economy went into recession. GDP per capita refers to the growth of the economy when shared out per person.
Oil and gas extraction increased by 7.8 per cent, its steepest rise since 1989. Tax cuts brought in in March to support the oil and gas industry are responsible for the surge in production, which came despite falling fuel prices.
Whilst the construction industry failed to show any sign of growth, remaining static, the service sector grew by 0.7 per cent, up from 0.3 per cent in the previous quarter. Manufacturing fell by 0.3 per cent
Chief economist at Capital Economics, Vicky Redwood, said that whilst growth is admittedly very uneven, it does look as if production is finally beginning to pick up across the UK.
This latest improvement in economic growth is likely to fuel speculation that Mark Carney, Governor of the Bank of England, will increase interest rates before the end of the year, the first rate rise since before the economic crisis of 2008.
According to Andrew Sentance, former member of the Bank’s Monetary Policy Committee which is tasked with setting interest rates, the UK’s economic recovery is now well established. Mr Sentance believes that the UK economy will grow by 2.6 per cent this year and said that, were he still a member of the MPC, he would vote in favour of rate rises.
For a typical loan of £30,000.00 over 120 months with a variable interest rate of 19.56% per annum, your monthly repayments would be £598.34.
Including a Product Fee of £2,400.00 (8% of the loan amount) and a Lending Fee of £807.00, the total amount repayable is £71,800.20.
Annual Interest Rates ranging from 11.88% to 29.38% (variable). Maximum 50.00% APRC. The loan must be paid back by your 70th birthday. Read more.
Think carefully before securing debts against your home may be repossessed if you do not keep up repayments on your mortgage or any other loan secured against it. If you are thinking of consolidating existing borrowing, you should be aware that you may be extending the terms of the debt and increasing the total amount you repay.
