Money Insider: Barclays tops the best buys with Golden ISA
Saturday 12 March 2011
on monday, Barclays announced its latest ISA offering, The Golden ISA (Issue 3), which went straight in at the top of the best buy tables courtesy of a 3.25 per cent AER rate, 0.1 per cent ahead of its nearest rival, Santander.
Under the terms of the new "Barclays Rate Promise" announced the same day, the bank has also committed to pass on any Bank of England Bank Rate increases in full on the ISA until March 2012, a promise which also applies to other selected accounts in the Barclays savings range.
While 3.25 per cent AER is a good rate in the current economic climate, once again neither of the two highest paying variable ISA deals will allow you to transfer in your ISA balances accumulated from previous tax years.
The Golden ISA 3 can be opened from just £1, although the rate includes an introductory bonus of 1 per cent for the first 12 months only, so it's important to review your tax-free savings at this time and switch to a better-paying account if needs be.
If you're looking to deposit your full 2011/12 allowance of £5,340 in this account for 12 months, you'll receive a tax-free return of £173.55.
On the subject of ISAs, results of a survey from Nationwide Building Society this week highlighted a lack of understanding among the general public when it comes to tax-free savings. Some 26 per cent of people didn't realise that there was a limit on how much they could pay in each year, and more worryingly, 39 per cent believed that tax is paid on the interest earned in an ISA.
If we want to get more people saving for their future, then we need to make the products and possibly the subscription limits clearer and easier to understand.
For the man on the street, it's no surprise that confusion reigns, with a choice of variable rates, fixed rates, some accounts allowing transfers in, some not, cash ISAs that can be switched to equity ISAs but not the other way round, short-term bonus rates, accounts only available via the internet, and some accounts allowing withdrawals where others don't – I could go on, but I think you get my drift.
This is just another example why the fundamentals of saving and borrowing money need to be included in the school curriculum as a mandatory subject for all children. With money at the centre of almost everything we do, why on earth are we not teaching people from an early age how to manage and make the most of their finances, rather than letting them suffer through ignorance in later life?
95% LTV mortgages still available
Clydesdale and Yorkshire Banks announced their commitment to supporting first-time buyers this week and remain one of only a handful of lenders prepared to lend up to 95 per cent of the property value.
In 2010, these banks found that 13 per cent of all their approved mortgages were for first-time buyers, with the average price of that first home coming in at £121,717.
The 95 per cent LTV mortgage from Clydesdale and Yorkshire is priced at 6.99 per cent fixed for three years, with a product fee of £599. Whilst the rate looks high when you compare it against the 4.85 per cent rate from Post Office for up to 85 per cent (plus £995 fee), regulatory constraints force banks to set aside between six and eight times as much capital reserves for high-value loans, hence some of the funding cost is passed on to customers. A lack of suitable first-time buyer finance being made available during the last three years has fuelled the demand for rented property, and due to limited supply, rental costs are soaring.
So while the 6.99 per cent rate may appear high, the option to be able to buy subject to finding a more realistic 5 per cent deposit (in this example £6086) may still appeal when comparing the monthly cost with that of a rented property. A 95 per cent mortgage based on the average price of £121,717 equates to £115,630 and would require monthly repayments of £816.52.
If on the other hand you decided to try and save a bigger 10 per cent deposit as demanded by other lenders, your monthly repayments would still be £773.54 per month, just £40 per month less – not really a huge benefit for that extra couple of years of hardship, struggling to amass the extra 5 per cent stake.
The mortgage market remains subdued and there's little likelihood of this changing in the short term, however it's essential that those who can prove they have the financial capability to service a 95 per cent LTV mortgage should at least be given the opportunity to do so.
Andrew Hagger is a money analyst at Moneynet.co.uk
Compare with the Independent: See how much you could save by switching credit cards. Compare now
Is it time to turn your back on Isas?
Make money as a mystery shopper
Lending price war erupts – this time for real
How to start your own internet business
The whole truth about legal fees: Conveyancing can knock a big hole in home-buyers' finances. To get the best deal you must cross-examine solicitors about their charges, says Sue Fieldman
- 1 The future of sex: The first female condoms were derided, mistrusted and shunned - but will their modern counterparts catch on?
- 2 South African rhino finally put down after roaming Kruger park for days with horn hacked off and bullet in brain
- 3 Italian pensioner hires an escort who turns out to be his son's girlfriend
- 4 Orgasm machine to deliver climax at the push of a button
- 5 Liam Neeson turned down James Bond role to marry Natasha Richardson
Apple's Tim Cook: Business isn’t just about making profit
Thousands of young people forced to go without food after benefits wrongly stopped under 'draconian' new sanctions regime
Ukraine crisis: New navy chief 'defects' and surrenders Crimean HQ as Putin claims ultranationalists forced intervention
Britain's top vet sparks controversy with call for ban on slashing animals' throats in 'ritual' slaughters for halal and kosher meat products
Ukraine crisis: Russia dismisses '3am ultimatum' as 'total nonsense'
If you're horrified by a flame-roasted dog, you should be shocked at a hog roast
iJobs Money & Business
£12000 per annum: Inspiring Interns: The company works with Tier 1 FTSE 100 Ba...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...
£30000 - £35000 per annum + generous benefits: Pro-Recruitment Group: Mixed Ta...
Day In a Page
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location
A one-bedroom apartment located within a private gated development, north of Turnham Green
Look forward to a brighter future at two-bedroom Sunny Cottages, ideal for Londoners looking to downsize
A three-bedroom red-brick cottage with outbuildings and pretty gardens, £200,000
This three-bedroom flat within a former textile factory spans the corner of the fourth floor and has a balcony
A charming four-bedroom Oxfordshire cottage with oak floors and chunky-beamed ceilings, £465,000
A beautiful one-bed flat in a sought-after portered block, with access to Norland Square communal gardens
A one-bedroom flat within a Sixties school conversion with high-spec design and open-plan kitchen, close to Lambeth North Tube, £435,000
A 17th century four-bedroom house, with open fireplaces, cellar and pool, £600,000
A three-bedroom, coach house with luxury open-plan living space and contemporary breakfast bar
A newly refurbished one-bedroom flat in the heart of Mayfair, close to Grosvenor Square
A charming four-bedroom house overlooking Burleigh Square Park, close to Thorpe Bay
A three-bedroom farmhouse with a large inglenook fireplace and exposed beams
A boutique mews house, set around a central courtyard, with three bedrooms and a private roof terrace
A four-bedroom farm-conversion with three bathrooms and two reception rooms
A two-bedroom detached house with ensuite bathrooms and a sun-drenched decked terrace, £750,000
A modern and spacious two-bedroom, penthouse flat with two bathrooms in a prestigious development
A beautifully renovated five-bedroom terrace with three reception rooms and a courtyard garden, £700,000
A four-bedroom period house which has been extended to provide almost 2,500sq ft of living space, £675,000
A pretty three-bedroom Georgian home with a 22ft drawing room and a master suite with a balcony, £525,000
A substanstial family home with five bedrooms and landscaped gardens in the much sought-after Branksome Park area
A well-presented three-bedroom house with front and rear gardens, close to White City station, £475,000
A handsome five-bedroom house in a sought-after location close to the city centre
A five-bedroom country home with valley views, equestrian stables and 27 acres of land, £725,000
A six-bedroom farm house with separate, detached cottages and 371 acres of land
A two-bedroom cottage with parquet floors, chunky beams and an open fireplace
A three-bedrrom flat with 2,733sq feet of living space, a beautiful private garden and 15 acres of communal grounds
A four-bedroom chalet bungalow with three bathrooms and a spacious garden, £525,000
A two-bedroom flat with an open plan kitchen and two balconies, close to Arsenal station
A Grade II-listed home with six bedrooms, secluded landscaped gardens and views across Hadley Green
A Grade II-listed mansion with two apartments and a cottage, near Gretna Green
A three-bedroom Grade II-listed mews house with vaulted ceilings and roof garden
A spacious Grade II-listed family home with annexe and equestrian facilities among four acres of land in Itchingfield
A four-bedroom home with exposed brick walls and open fires in the picturesque village of Northill
A Grade II-listed property with five bedrooms and unique tower, overlooking Hastings Old Town
A charming five-bedroom detached family home, set within half an acre in Kew