ISSN 2631-570X (Online)

11 February 2020

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AER	£1K	£5K
CASH ISAs
Easy Access	-	-
Notice Variable	-	-
1 Year Fixed	-	-
2 Year Fixed	-	-
3 Year Fixed	-	-
4 Year Fixed	-	-
5 Year Fixed	-	-
Lifetime ISAs	-	-

AER	£10K	£50K
VARIABLE RATES
Easy Access	-	-
1 Month	-	-
3 Months	-	-
3 Months +	-	-

AER	£10K	£50K
FIXED RATES
1 Year	-	-
1 Year	-	-
2 Year	-	-
3 Year	-	-
4 Year	-	-
5 Year +	-	-

AER	£10K	£50K
OFFSHORE ACCOUNTS
Variable	-	-
Fixed	-	-

AER	£10K	£50K
BUSINESSES Charities, Clubs, Pension Funds, Client A/cs etc
Variable	-	-
Fixed	-	-

AER	£25pm	£100pm
REGULAR SAVINGS
Variable	-	-
Fixed	-	-
ISA	-	-

AER	£100	£1K
CHILDRENS ACCOUNTS
Variable	-	-
Fixed	-	-
JISA	-	-

Full list of Guides

Post Office Money has increased the rate on one of its easy access accounts this week, resulting in it now offering a highly competitive rate for its terms. Online Saver Issue 44, which is operated by Bank of Ireland UK, now pays 1.32%, including a 0.82% bonus for 12 months. This account requires a minimum opening deposit of just £1 and pays interest yearly. It allows unlimited further additions and withdrawals. The account can only be opened and managed online. For those looking to supplement their income, there is also a version
of this account that pays
interest monthly at a slightly
lower gross rate.

ISA rate rise

This week, Virgin Money increased the rate on its easy access ISA. Double Take E-ISA Issue 14 pays 1.31% yearly on an opening minimum deposit of just £1. This ISA allows unlimited further additions, but withdrawals are restricted to two per calendar year. Transfers in are allowed and there are no penalties for transfers out. The ISA can only be opened and managed online. In addition to this, for those looking to supplement their income, there is a version of the ISA that pays interest monthly at a slightly lower gross rate.

At the same time, Virgin Money increased the rate on one of its easy access accounts. Double Take E-Saver Issue 14 pays 1.31% yearly on an opening minimum deposit of £1. The account allows unlimited further additions, but withdrawals are restricted to two per calendar year. The account can only be opened and managed online. For income-seekers, there is also a version of this account that pays interest monthly at a slightly lower gross rate.

New fixed rate ISAs

Cambridge Building Society launched a two and five-year fixed rate ISA this week. 2 Year Fixed Rate ISA (Issue 23) pays 1.30% yearly and 5 Year Fixed Rate ISA (Issue 13) pays 1.70% yearly. Both ISAs require a minimum opening deposit of £500 and allow further additions during the 2019/20 and 2020/21 tax years only. Earlier access is permitted on these ISAs but subject to 180 days’ interest loss on the two-year version and 240 days’ interest loss on the five-year version. Transfers in are allowed, while transfers out are subject to the same interest-loss penalty as earlier access. These ISAs can be opened in branch, by post or by phone and then managed in branch, by post, by phone, online and via mobile app.

At the same time, Cambridge Building Society also launched a restricted one-year fixed rate bond this week. Members’ 1 Year Fixed Rate Bond (Issue 1) pays 1.20% yearly on an opening minimum deposit of £1,000. This bond is only available to existing members who have held a mortgage or savings account with Cambridge Building Society for three months. It does not allow further additions or withdrawals. It can be opened in branch, by post or by phone and then managed in branch, by post, by phone, online and via its mobile app.

New bond launched

Leeds Building Society launched a new fixed rate bond this week. Limited Issue 19 Month Fixed Rate Bond (Issue 2) pays 1.36% yearly on an opening minimum deposit of

Looking for an Easy Access Cash ISA? See Latest Top Rates in left hand column

Children’s Accounts

Encouraging children to save from an early age is a good idea and most providers offer accounts aimed specifically at children.

The top-paying children’s account on the market with no opening restrictions this week is from HSBC. MySavings is an instant access account for those aged between seven and 17 years and pays a variable rate of 2.96% gross monthly, although it should be noted that 0.75% is paid on balances of £3,001 and over. From an opened balance of £10, the account must be opened in branch, but can then also be operated by phone, online and via its mobile app.

Unlimited further additions and withdrawals are allowed, although a parent/guardian’s signature is required for withdrawals of £50 and over for those under the age of 11. As an extra incentive, a free moneybox is available when you open this account.

£100. This bond’s term ends on 31.10.21. It allows further additions until 31.3.20 but withdrawals are not permitted. The bond can be opened by branch, by post or online and then managed by branch and by post.

At the same time, Leeds Building Society also launched a new fixed rate ISA. Limited Issue 15 Month Fixed Rate ISA pays 1.26% yearly on an opening minimum deposit of £100. Its term ends on 30.06.21. This ISA allows further additions until 31.3.20, while earlier access is permitted on 100 days’ loss of interest. Transfers in are allowed and transfers out are subject to the same interest-loss penalty as earlier access. This ISA can be opened in branch, by post or online and then managed in branch and by post.

Two-year bond launched

Buckinghamshire Building Society has launched a new two-year fixed rate bond this week. Fixed Rate Bond Issue 123 pays 1.60% yearly until 28.02.22 on an opening minimum deposit of £1,000. It allows further additions while the issue remains open. Earlier access is permitted but subject to 180 days’ loss of interest. This bond can be both opened and managed in branch and by post.

For those looking to supplement their income, there is a version of this bond that pays interest monthly at the same gross rate.

Short-term ISA rate increase

This week saw OakNorth Bank increase the rate on its one-year fixed rate ISA. 12 Month Fixed Rate Cash ISA pays 1.37% monthly on an opening minimum deposit of £1. This ISA allows further additions up to 2019/20 tax year allowance. Earlier access is also allowed but subject to 90 days’ loss of interest. Transfers in from cash ISAs are permitted and transfers out are subject to the same interest-loss penalty as earlier access. This ISA can only be opened online, but can then be managed by phone, online and via its mobile app.

Bonds issue numbers changed

This week, Virgin Money changed the issue numbers on its one and two-year fixed rate bonds. 1 Year Fixed Rate Bond Issue 457 pays 1.00% yearly until 01.03.21 and 2 Year Fixed Rate Bond Issue 458 pays 1.20% yearly until 01.03.22. Both bonds require a minimum opening deposit of just £1. Further additions are allowed while the issue remains open, but withdrawals are not permitted. These bonds can be opened in branch, by post or by phone and then be managed in branch and by post.

For those looking to supplement their income, there are versions of both these bonds that pay interest monthly at the same gross rate as the one-year version but at a slightly lower gross rate on the two-year version.

Fixed rate bonds launched

Zenith Bank (UK) Ltd launched a one two and three-year fixed rate bond this week. Raisin UK – 1 Year Fixed Term Deposit pays 1.55% on maturity, Raisin UK – 2 Year Fixed Term Deposit pays 1.68% on anniversary and Raisin UK – 3 Year Fixed Term Deposit pays 1.75% on anniversary. All these bonds require a minimum opening deposit of £1,000. These bonds benefit from Raisin UK offering a bonus of up to £1,000 when a savings account is opened via its website (terms and conditions apply). They do not permit further additions or withdrawals. The bonds must be opened online, but can then be managed by post, by phone and online.

Full list of Guides

Bank and Building Society Reviews

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How safe are your savings?

Our guide to Depositor Protection tells you what guarantees apply if your bank or building society goes bust, while our guide to Who Owns Whom? tells you where your bank or building society is licenced.

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.

Where would be the best place to invest £500 for our newly born grandson?

A Junior ISA (JISA) is designed as a type of savings account for children. Although a parent or guardian must open a JISA on behalf of their child, contributions can then be made by anyone, friend or family, up to the annual limit, which currently stands at £4,368. Lump sum and regular payments are both welcome. There are two types of JISAs. A cash JISA pays interest on the amount deposited, or taking a riskier approach, a stocks and shares JISA allows you to invest in shares or investment funds. Coventry Building Society currently pays the market-leading cash JISA rate of 3.60% yearly, with interest paid tax-free.

Parents take the management reins of a JISA until the child turns 16. However, it is not until the 18th birthday, when a JISA automatically becomes an adult ISA, that money can be taken from an account.

Get your savings questions answered by Rachel by emailing rachel@saversfriend.co.uk We regret we cannot answer emails personally

This week's
average rates

How do your savings compare?

No Notice	0.57%
Notice	1.07%
Cash ISA	1.07%
1 Year Fixed Rate Bond	1.17%
2 Year Fixed Rate Bond	1.27%
3 Year Fixed Rate Bond	1.38%
4 Year Fixed Rate Bond	1.57%
5 Year Fixed Rate Bond	1.61%
11 February 2020

Alternative sources of income

Equity release sees a four-fold growth during last decade

Over the last decade, equity release has proved an increasingly popular way for those in retirement to supplement their income. New figures released by the Equity Release Council show that the amount borrowed through equity release has seen an almost four-fold increase in the last 10 years.

In fact, the published figures reveal that the amount in property wealth accessed by older homeowners increased from £945.97m in 2009 to £3.92bn in 2019. However, despite this growth over the past decade, last year saw the equity release market saturate, with lending volumes remaining largely unchanged since 2018 when £3.94bn was unlocked.

According to the Equity Release Council, increased consumer demand for equity release products is due to a number of factors, including homeowners recognising the role property wealth plays in supporting their retirement finances. In addition to this, it credits improved product features and flexibilities, such as the ability to make voluntary or partial repayments with no early repayment charge for helping to boost the popularity of the sector.

In October 2019, figures released by the Equity Release Council showed that between July and September 2019, the market had seen a 6% increase in equity release activity compared to the previous three months. As well as this, according to the most recent figures released, the final three months of 2019 were the busiest period of the year, with over £1bn in property wealth being unlocked. This would suggest that although 2019 saw a slow start, the market began to pick up in the second half of the year. Commenting on the figures, David Burrowes, chairman of the Equity Release Council, said: “After a period of steady growth, the market has reached a point of consolidation in 2019 with lending volumes in line with 2018. The sector enters 2020 in a strong position with updated standards and a greater number of diverse members signed up than ever before. Looking ahead, we’ll continue to work with stakeholders to ensure consumers are able to access the best advice while ensuring joined-up financial planning so that equity release remains a key consideration in mainstream retirement planning.

“Previously viewed as a niche product to support people’s retirement plans, the untapped potential of equity release is now being recognised. This comes as a growing number of customers are recognising the important role property wealth can play in meeting their retirement needs. This has been driven by competition, falling interest rates, increasing numbers of flexible and innovative product options and supported by rigorous standards in the market.”

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Equity release sees a four-fold growth during last decade

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