Money Insider: Barclays tops the best buys with Golden ISA

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

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Life and Style
food + drink
Life and Style
love + sex A new study has revealed the average size - but does that leave men outside the 'normal' range being thought of as 'abnormal'?
UK Border Control
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Christine McCleave: FP&A Analyst

    £36,000 - £40,000: Christine McCleave: Are you looking for a new opportunity a...

    Recruitment Genius: Sales Executive - OTE £40,000

    £15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

    Austen Lloyd: Law Costs HOD - Southampton

    £50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

    SThree: Recruitment Resourcer

    £20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

    Day In a Page

    Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

    Climate change key in Syrian conflict

    And it will trigger more war in future
    How I outwitted the Gestapo

    How I outwitted the Gestapo

    My life as a Jew in wartime Berlin
    The nation's favourite animal revealed

    The nation's favourite animal revealed

    Women like cuddly creatures whilst men like creepy-crawlies
    Is this the way to get young people to vote?

    Getting young people to vote

    From #VOTESELFISH to Bite the Ballot
    Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

    Poldark star Heida Reed

    'I don't think a single bodice gets ripped'
    The difference between America and Israel? There isn’t one

    The difference between America and Israel? There isn’t one

    Netanyahu knows he can get away with anything in America, says Robert Fisk
    Families clubbing together to build their own affordable accommodation

    Do It Yourself approach to securing a new house

    Community land trusts marking a new trend for taking the initiative away from developers
    Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

    David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

    The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

    Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
    With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

    Money, corruption and drugs

    The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
    America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

    150 years after it was outlawed...

    ... America's first slavery museum is established in Louisiana
    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

    The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
    Tony Oursler on exploring our uneasy relationship with technology with his new show

    You won't believe your eyes

    Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
    Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

    Moores must go. He should never have been brought back to fail again

    The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
    War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

    The battle for Mosul will unleash 'a million refugees'

    Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn