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

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

    Recruitment Genius: Digital Optimisation Executive - Marketing

    £30000 - £35000 per annum: Recruitment Genius: The UK's fastest growing, multi...

    Recruitment Genius: Financial Reporting Manager

    £70000 - £90000 per annum: Recruitment Genius: A Financial Reporting Manager i...

    Recruitment Genius: Payments Operations Assistant

    £23000 - £25000 per annum: Recruitment Genius: They win lots of awards for the...

    Recruitment Genius: Telephone Debt Negotiator

    £13500 - £20000 per annum: Recruitment Genius: This nationwide enforcement com...

    Day In a Page

    Syria civil war: Meet the military commander who says his soldiers will not rest until every inch of their war torn country is free of Islamist 'terrorists'

    ‘We won’t stop until Syria is back to normal’

    Near the front lines with Islamist-controlled towns where Assad’s troops were besieged just last month, Robert Fisk meets a commander confidently preparing his soldiers for battle
    Fifa corruption: Strip Qatar of the World Cup? Not likely

    Strip Qatar of the World Cup? Not likely

    But if a real smoking gun is found, that might change things, says Tom Peck
    Twenty two years later Jurassic Park series faces questions over accuracy of the fictional dinosaurs in it

    Tyrannosaurus wrecked?

    Twenty two years on, Jurassic Park faces questions over accuracy
    The inside story of how Bill Clinton built a $2bn global foundation may undermine Hillary's chances

    The inside story of how Bill Clinton built a $2bn global foundation...

    ... and how it may undermine Hillary's chances in 2016
    Genes greatly influence when and how many babies a woman will have, study finds

    Mother’s genes play key role in decision to start a family

    Study's findings suggest that human fertility is still evolving
    12 best olive oils

    Extra-virgin, cold-press, early-harvest, ultra-premium: 12 best olive oils

    Choosing an olive oil is a surprising minefield. Save yourself the hassle with our handy guide
    Rafa Benitez Real Madrid unveiling: New manager full of emotion at Bernabeu homecoming

    Benitez full of emotion at Bernabeu homecoming

    There were tears in the former Liverpool manager’s eyes as he was unveiled as Real Madrid coach. But the Spaniard knows he must make tough decisions if he is to succeed
    England can win the Ashes – and Elvis Presley will present the urn

    England can win the Ashes – and Elvis will present the urn

    In their last five Test, they have lost two and drawn two and defeated an India side last summer who thought that turning up was competing, says Stephen Brenkley
    Sepp Blatter resignation: The beginning of Fifa's long road to reform?

    Does Blatter's departure mean Fifa will automatically clean up its act?

    Don't bet on it, says Tom Peck
    Charles Kennedy: The baby of the House who grew into a Lib Dem giant

    The baby of the House who grew into a Lib Dem giant

    Charles Kennedy was consistently a man of the centre-left, dedicated to social justice, but was also a champion of liberty and an opponent of the nanny-state, says Baroness Williams
    Syria civil war: The harrowing testament of a five-year-old victim of this endless conflict

    The harrowing testament of a five-year-old victim of Syria's endless civil war

    Sahar Qanbar lost her mother and brother as civilians and government soldiers fought side by side after being surrounded by brutal Islamist fighters. Robert Fisk visited her
    The future of songwriting: How streaming is changing everything we know about making music

    The future of songwriting

    How streaming is changing everything we know about making music
    William Shemin and Henry Johnson: Jewish and black soldiers receive World War I Medal of Honor amid claims of discrimination

    Recognition at long last

    Jewish and black soldiers who fought in WWI finally receive medals after claims of discrimination
    Beating obesity: The new pacemaker which helps over-eaters

    Beating obesity

    The new pacemaker which helps over-eaters
    9 best women's festival waterproofs

    Ready for rain: 9 best women's festival waterproofs

    These are the macs to keep your denim dry and your hair frizz-free(ish)