Rachel Springall

Rachel Springall

Finance Expert & Press Officer
Published: 23/01/2020

The Moneyfacts Weekly Product News is a round-up of the latest products or rate changes to hit the consumer finance market this week. The deals are available right now, but may be subject to change. Find the best product for you.

This week hopes of a highly competitive ISA season were dampened with the news that average cash ISA rates are at their lowest levels since 2018. In fact, research carried out by Moneyfacts.co.uk found that this month the average easy access ISA rate had fallen to 0.85%, while the average notice ISA had dropped to 1.12% and the average one-year fixed ISA had dropped to 1.15%. At the top of the charts, a number of providers reduced their rates including UBL UK, which had been topping the charts for over a month. There was some good news for savers this week, however, as Hampshire Trust Bank increased the rates on two highly competitive short-term ISAs earlier in the week .

It should be noted that the rates below are the best rates available on Thursday and, although correct at the time of publishing, they may not be available on Friday.

The Government has unveiled a 10-year plan that aims to help millions of consumers struggling financially.

The Money & Pensions Service (MaPS), a Government agency, has stated that over the next decade it plans to create a nation of savers, while also reducing the number of consumers who are regularly using credit to pay for food and bills. Data released by MaPS found that a worrying 11.5 million consumers currently have less than £100 in savings to fall back on if they found themselves in financial difficulties and that nine million often use credit to pay for food or essential bills.

In addition to tackling a lack of savings and the reliance of credit to pay for everyday essentials, MaPS is also aiming to increase the number of children and young people getting a meaningful financial education, to ensure that more people are getting the debt advice they need and to raise awareness about the need to save for retirement.

Commenting on the 10-year plan MaPS has set out, Caroline Siarkiewicz, acting chief executive at MaPS, said: “Financial wellbeing underpins personal health and happiness but it doesn’t happen by chance. We’re launching a strategy for entire lifetimes, aiming to expand financial education for children while ensuring everyone is equipped to plan for and enjoy their retirement. Key initiatives include increasing the availability of affordable credit, more payroll savings products and an expansion of free debt advice for when people are in crisis.

“The Money and Pensions Service will be the catalyst for a financial wellbeing movement, transforming how people engage with their money and pensions. We have a decade to make a difference and we cannot achieve change alone, so we will be connecting companies, charities and other organisations which share our vision, to make this happen.”

Lloyds Banking Group and TSB are the latest banks to announce changes to their overdraft fees, which will see some borrowers being charged 49.9% for going into their overdraft.
Lloyds Banking Group, which includes high street brands Lloyds, Bank of Scotland and Halifax, has changed its overdraft fees so that from the 6 April 2020, customers will be charged a flat rate of 39.9% or 49.9% EAR on all overdraft borrowing, while Club Lloyds customers will be charged either 27.5% or 49.9%. The rate customers are charged depends on existing information the bank holds about the customer’s credit history and how they operate their account.

The bank has also revealed that it is dropping the interest-free tier on some accounts to just £50, however it has not stated which accounts will be impacted.

Lloyds Banking Group has stated that the majority of its customers will be charged the lower rate, with many paying less on the new overdraft fee charges than its current charges, however it means that for many consumers it will be cheaper to borrow on a credit card instead.

The Cambridge Building Society has recently announced that it is launching a new range of Credit Assist mortgages, with the aim of targeting residential customers who have a history of missed payments, County Court Judgements (CCJs) or defaulting on credit agreements.

This new range of mortgages replaces The Cambridge Building Society’s previous Home Solutions mortgage products.

Customers will have a choice of either a fixed rate or discounted rate option on both new products, the Credit Assist Mortgage and Credit Assist Mortgage Extra.

The two new mortgage products carry different qualifying criteria, with the Credit Assist Mortgage being available to consumers who have missed up to five payments in the last two years on credit card, mail order or utility bills, as well as those who have unsatisfied defaults within the last two years.

The Credit Assist Mortgage Extra offers hope to customers who have a more challenging credit history, specifically those with three or more unsecured loan repayments, two missed secured loan repayments, as well as CCJs or those who have unsatisfied debts up to £5,000.

Neither of the new mortgage products are likely to be easily suitable to first-time buyers as a minimum of 15% equity is required for the Credit Assist Mortgage options, which rises to 30% equity for the Credit Assist Mortgage Extra products.

Tracy Simpson, head of lending, commented: “At the Cambridge we’re committed to introducing solutions that help a wide range of customers, and our newly launched Credit Assist range specifically aims to help those mortgage customers who have experienced credit issues in the past and who are finding it difficult to secure a mortgage. Credit Assist helps these customers get back on track. In addition, our experienced team review each application on an individual basis, which provides the highest level of support.”

The Cambridge Building Society offers mortgages for residential properties in Bedfordshire, Buckinghamshire, Cambridgeshire, Essex, Hertfordshire, Norfolk, Northamptonshire and Suffolk.

For a more in-depth treatment of home-buying options for those with a poor credit background, take a look at our dedicated guide: Obtaining a mortgage if you have a bad credit history. In addition, our mortgage comparison charts give you the low-down on the latest deals across the whole UK marketplace.

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