Weekly Money

Round-up of the personal finance stories you may have missed 27 April to 1 May

The lowest-ever two year fixed rate mortgage has been launched by the Co-operative Bank (PA)

More mortgage wars; credit card fees cut; few affordable homes on market: inheritance dying as people are giving while living; digital-only banks set to launch; ‘Bank’ holidays on the way out; the stories we noticed this week

1 May

The lowest-ever two year fixed rate mortgage has been launched today by the Co-operative Bank. At just 1.09 per cent, the rate will lead the best-buy tables but is only available to those with at least a 40 per cent deposit and comes with an expensive arrangement fee of £1,499.

“With the Co-Op launching a two-year fix at 1.09 per cent, unbelievable as it may seem, it could only be a matter of time before we have a sub-1 per cent two-year fix,” predicted Mark Harris, chief executive of mortgage broker SPF Private Clients.

“However, most borrowers are opting for five-year fixes for medium-term certainty, rather than two-year deals. Given that five-year money is not that much more expensive than two year, this may continue to be the case, even with this rock-bottom rate.”

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A woman living in Nottinghamshire who bought a Premium Bond back in 2010 has won one of this month’s £1m jackpots. The other winner is a man from Essex who only bought his winning Bond in May 2013.

More than £60m was paid out to more than 2 million prizewinners this month, with the bulk receiving £25, although there were also four prizes of what could be a life-changing £100,000, 10 prizes of £50,000, 18 of £25,000 and 44 of £10,000.

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Esher in Surrey is the most expensive place in the UK to rent a two bed property outside of London, reckons RightMove.

It would set you back almost £2,000 per month, making Esher more expensive than Outer London, where average two-bed rents are currently £1,493 per month.

Nationally, excluding London, the average asking rent for a two bed home is currently £677 per month, the property website says.

30 April

People’s savings are getting smaller, but this time they’re not blaming them on Coalition cutbacks, but on an expensive Christmas and unexpected costs. The average savings balance in the first three months of the year stood at £16,690, more than £1,000 lower than the last three months of 2014 when they were at £17,945.

The figures, published today by the Halifax, reveal that a quarter of savers unexpectedly raided their savings between January and March. The reasons why people dipped into their savings? Overspending, and covering debts, unexpected bills and repairs.

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Retail website Amazon last night doubled the minimum spend needed for free delivery from a tenner to £20. It introduced a £10 minimum spend in July 2013, but has now raised it to £20, according to the Moneysavingexpert website.

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Nationwide will tomorrow scrap its £12 charge for credit card customers who break through their agreed spending limit.

In a challenge to rivals, it will also not immediately end a 0 per cent promotional deal the first time a payment is missed and will no longer charge interest to cardholders who buy goods on a 0 per cent balance transfer card as long as the purchase price is paid off in full.

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The last of the recent energy price cuts takes effect today when SSE cuts its standard gas tariff by 4.1 per cent.

But new analysis suggests that a 10 per cent cut across the board would lift a staggering 1.3 million homes out of fuel vulnerability. That’s a million more than have benefited from the modest cuts so far, reckons uSwitch. Fuel vulnerable homes spend a 10th of their income on energy.

29 April

Four out of five properties on the market aren’t affordable for the average family looking to clamber onto the housing ladder, reckons Shelter.

Its research suggests that only 17 per cent of properties currently on the market with at least two bedrooms are affordable for families with an average income of £30,748.

The problem is most severe in London. The housing charity identified just 43 “affordable” homes on the market for families in the capital. With just over a week until Election Day, the charity warns that unless politicians act swiftly to build the homes we need, millions will be forced to cope with continued instability and sky high housing costs.

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The idea of leaving a traditional inheritance is dying out. Instead older people say they are “giving while living”, according to new research.

A fifth of retirees say they regularly give to their grown-up children, while almost one in ten are doing the same for their grandchildren, HSBC found.

But Caroline Connellan, head of wealth at the bank, warned: “New pension freedoms have made savings more accessible, but people should carefully consider the right balance between helping their family and making sure they have sufficient income through retirement.”

Tom McPhail, head of pensions research, Hargreaves Lansdown, agreed. “For most people, it would make sense to pass on wealth in retirement only after taking sensible steps to secure financial security for the rest of your life,” he said.

28 April

Bargain-hungry Brits are using more deals and discount sites than ever. Consumers spent a record £16.5bn last year on products and services bought through price comparison, voucher, cashback, loyalty and product review websites, some 14 per cent more than in 2013 – according to the Online Performance Marketing study by PwC.

Almost three out of five use a voucher code site or a mobile voucher app at least once a month, while almost a third visit loyalty sites.

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Several digital-only banks will launch this year, and one in three consumers reckons they’ll outnumber traditional ones within five years.

New banks such as Atom and Starling will have no branches on the high street or telephone services - instead all transactions will take place online or via mobile devices.

But new research from Intelligent Environments shows that many of us are still resistant to the idea. More than half of banking customers don’t like the notion of not being able to speak to someone in person if they have a problem, while almost half say they wouldn’t switch because branches are important to them.

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The traditional Bank Holiday could soon be a thing of the past as more of Britain’s high street lenders choose to open their doors on the holiday.

Barclays already opens between 40 to 50 branches across the country on Bank Holidays, depending on demand from the local community and customers, it says. Now from next Monday 5 May, RBS will open the doors at 34 of its busiest RBS and NatWest branches on a trial basis. If it’s a success it promises to open more branches on future Bank Holidays. Bank Holidays became law in 1871 to give workers time off.

27 April

First Utility is offering from today a free, portable home-heating thermostat worth £279 to anyone signing up to its new three-year fixed tariff, iControl Fixed May 2018.

The Cosy smart thermostat includes a mobile app, so users can control their home heating from anywhere. To get it, you’ll need to fix your tariff for three years. That will ensure that you avoid any price increases for 36 months, but you’ll also miss out on any potential price cuts that may be in the offing. To find out more go to first-utility.com/energy/get-cosy

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Brits would prefer to drink alone than share a pint with any of political party leaders, according to the Greene King Leisure Spend Tracker. Two-fifths of people said would much rather not drink with any of the leaders.

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First direct has today launched a tempting 1.68 per cent three year fixed rate repayment mortgage. However, it has a whopping £1,450 fee and is only available to borrowers who have at least a 35 per cent deposit or equity. However the lender does offer a range of loans that have no fee.