Savings News

Saga – specialists in insurance products and travel services for the over 50s – has hit the headlines this morning after announcing that Marcus by Goldman Sachs is to become its new long-term savings partner. Together Saga and Marcus aim to launch new products from autumn 2019.

Marcus, launched in the UK in September 2018, has so far attracted over 250,000 UK customers. Currently, its Online Savings Account sits near the top of Moneyfacts.co.uk’s easy access savings comparison chart, paying 1.50%, which includes a 12-month bonus of 0.15%, for those looking to invest between £1 to £100,000.

After a period of challenging results, this announcement is one of several strategic initiatives by Saga designed “to deliver high-quality products and services to its customers”.

Commenting on the new partnership, Lance Batchelor, chief executive officer of Saga, said: “This is an exciting time for Saga and our customers as we announce our new long-term savings partnership. We know that our customers hold a large proportion of their wealth in savings and want to know that they’re getting a great return with a brand they can trust.

“This is an important strategic partnership for Saga that will help us provide innovative and high- quality products that will be designed not just to meet our customers’ needs, but to exceed their expectations.”

Harit Talwar, global head of Marcus by Goldman Sachs, added: “We are excited to collaborate with brands such as Saga and to provide savings products to their customers. This partnership is an example of our ambition to bring our global scale and deep capabilities to meet a broad range of personal finance and investment needs.”

So far, the markets have reacted favourably to this news, with Saga shares up by around 6% in trading yesterday morning. 

Unusual activity within the ISA market has seen new easy access ISA rates being introduced that are not only topping the chart with the same rates as during ISA season, but also offering the same top rate as non-ISA easy access accounts, analysis by Moneyfacts.co.uk shows.

Last month saw a rise in easy access ISA rates, with both Coventry Building Society and Virgin Money increasing their rates to 1.50% variable, currently the top rate available for an easy access ISA without any opening restrictions, with both ISAs allowing transfers in from cash and stocks & shares ISAs. These rates bring easy access ISAs back to the same levels that were seen during peak ISA season when Santander topped the chart with its 123 eISA (Issue 5) offering a rate of 1.50%, that was later reduced on 16 April.

Competition within the fixed rate ISA market has also remained strong, with the top rate available at 2.35% variable launched by United Trust Bank on a seven-year fixed rate ISA at the end of May. Meanwhile, there has been less activity at the top of the one-year fixed rate ISA market, with the top rate currently at 1.68%, which is being offered by Principality Building Society on an 18-month fixed rate ISA and has remained unchanged since early April. 

Today a rate increase from PCF Bank on a seven-year bond has resulted in it taking third place in the fixed-rate bond chart.

PCF Bank is now offering a rate of 2.75% fixed on its 7 Year Term Deposit Issue 10, a rate that matches the top rate in the fixed-rate bond chart. This seven-year bond requires an opening deposit of £1,000 and pays interest on each anniversary. The account allows further additions for 14 days from account opening, but withdrawals and early access are not permitted. It can be opened online and by post then managed both these ways as well as by phone.

Overall the fixed rate bond chart offers many of the best saving rates currently available, especially on long-term fixed rate bonds. Although the current uncertain economic climate means that many savers are preferring quick access to their funds, those that are prepared to lock their money away for five or more years are rewarded with the most competitive rates on the market.

This week, figures from Moneyfacts.co.uk revealed that the average notice account rate has risen to 1.15% AER, which is the highest seen since October 2012 when it stood at 1.19% AER. In addition to this, the top five notice account rates in the market have also improved and are now paying an average of 1.88 AER%, an increase from 1.62% AER a year ago. Saying this, savers looking for the best rates this week will still have to lock their money away into a long-term fixed account, with the highest rate coming from a five-year bond that was offering an expected profit rate of 2.75%. The best rate in the notice account chart was 1.92% AER on a 90-day notice account, while in the easy access chart the top rate on offer without opening restrictions was 1.50% AER.