1 Month
Ask Rachel
Working in the financial industry for over 30 years, Rachel Thrussell is the leading independent expert on UK savings products. Her views are constantly in demand from both the industry and the press.
Why do most of the best bonds that you show seem to disappear almost as soon as they have launched?
It is certainly true that the top-paying bonds are vanishing quickly, sometimes within days of their launch. The reason is that accounts with an attractive rate can expect a massive influx of funds very quickly. As soon as the bank or building society has the quota of money through the door that they have decided they can pay the rate on, the product will be withdrawn. Unfortunately, at the minute, most banks and building societies don’t really need depositor’s money in order to fund their other business activities, such as mortgage lending, hence the relatively low rates and short amount of time the better rates are available.
The lesson to learn is to act fast when an attractive rate becomes available, as it is unlikely to be around for too long!
This week's
average rates
| No Notice | 0.60% |
| Notice | 1.11% |
| Cash ISA | 1.14% |
| 1 Year Fixed Rate Bond | 1.25% |
| 2 Year Fixed Rate Bond | 1.35% |
| 3 Year Fixed Rate Bond | 1.49% |
| 4 Year Fixed Rate Bond | 1.71% |
| 5 Year Fixed Rate Bond | 1.76% |
| 3 December 2019 | |
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Financial advice can increase wealth by £47,000
A simple way for consumers to increase their wealth could be to take financial advice. New research carried out by researchers at the International Longevity Centre – UK (ILC) found that, holding other factors constant, those who took financial advice from around the turn of the century (2001-2006) were on average £47,706 better off (in pensions and financial assets) a decade later than those who did not.
The research, which was commissioned by Royal London, used detailed analysis of the Government’s Wealth and Assets Survey, which tracked the wealth of thousands of people over two yearly ‘waves’ since 2004-06. It found that taking financial advice increased wealth by an extra £31,000 in pension wealth and over £16,000 in non-pension wealth.
It also found that taking advice helped increase wealth for those of more modest means compared to affluent consumers. The non-affluent group increased their financial wealth (for example shares, ISAs and bank accounts) by 35% by taking financial advice, compared to a 24% uplift by the affluent group. On pension wealth, the non-affluent group increased their wealth by 24%, compared to just 11% by the affluent group.
One reason why taking financial advice led to a greater increase in wealth is that those taking advice were more likely to invest in assets offering greater rewards, though with greater risk.
Commenting on the research, Steve Webb, director of policy at Royal London said: “Many of those who receive financial advice can testify to its value, but it has always been difficult to quantify. This research uses the latest statistical methods to identify a pure ‘advice effect’ and it is strikingly large. If financial advice can add £40,000 to your wealth over a decade compared with not taking advice, it is incumbent on Government, regulators, providers and the advice profession to work together to make sure that more people are sharing in this uplift.”
International Longevity Centre director, David Sinclair added: “The simple fact is that those who take advice are likely to be richer in retirement. But it is still the case that far too many people who take out investments and pensions do not use financial advice. And only a minority of the population has seen a financial adviser. We must now work together to get more people through the “front door” of advice.”
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