The Sunday Times - UK (2022-04-10)

14 The Sunday Times April 10, 2022

MONEY

FIVE THINGS YOU NEED TO KNOW ABOUT... INVERTED YIELD CURVES

THE

FIVER

5

1

Financial events are nearly impossible to predict, but it could be argued that a US economic recession is different because of one key indicator: an inverted yield curve.

2

The yield curve shows the returns available from bonds issued by a government for different maturity periods. The US curve runs from short-dated bonds of between three months and two years, to longer- dated bonds of between five and 30 years.

3

Usually, investors demand a higher return for longer- dated bonds and less for shorter-dated ones. An inversion of the yield curve is when a bond with a longer duration yields less than one with a shorter duration. Last week, the two-year bond briefly yielded more than the ten-year bond.

4

This is worrisome because an inversion of the curve has preceded each US recession since 1955 by between six months and two years, according to a report in 2018 by the Federal Reserve Bank of San Francisco, with only one false alarm.

5

Should we worry? Many fear that central banks will raise interest rates too fast and too high, forcing mortgage rates up and causing a recession. Others noted that the inversion was brief and other parts of the curve, such as ten-year bonds versus three-month bonds, are nowhere near inverting. Only time will tell if this is one of the few exceptions to the rule.

David Brenchley

CASH ISAS INSTANT ACCESS Provider Account name Min deposit Interest Transfers in Contact Marcus Cash Isa £1 1% No marcus.co.uk Shawbrook East Access Cash Isa Issue 20£1,000 0.92% Yes shawbrook.co.uk FIXED RATE Provider Account name Term Min deposit Rate Transfers inContact Shawbrook Bank 1 Year Fixed Rate Cash Isa Bond Issue 591 year £1,000 1.4% Yes shawbrook.co.uk United Bank UK 2 Year Fixed Rate Cash Isa2 years £2,000 1.71% Yes ubluk.com

Source: savingschampion.co.uk — 0808 178 5354

CHILDREN’S ACCOUNTS Provider Account name Account type Min deposit Interest rate Contact Dudley BS Junior Easy Saver Regular Saver £10 3.5% dudleybuildingsociety.co.uk Saffron BS Children’s Regular Saver Issue 2Regular Saver £0 3% saffronbs.co.uk Santander^1 123 Mini Current Account Current Account £1,500 2.96% santander.co.uk

(^1) Interest paid on balances between £1,500 and £2,000 2 0.25% paid on balances above £3,000
JUNIOR ISAS
Provider Account name Min deposit Interest rate Rate Contact
The Family BS Cash Junior Isa £3,000 2.4% Variable familybuildingsociety.co.uk
Coventry BS Junior Cash Isa (2) £1 2.35% Variable coventrybuildingsociety.co.uk
Tesco Bank Junior Cash Isa £1 2.25% Variable tescobank.com
Source: savingschampion.co.uk — 0808 178 5354
Best Buys
FOREIGN
CURRENCY
Interbank rates at 5pm
on Friday, which show
where the market is
trading. They are not
indicative of the rate
you could get.
EURO
GBP>EUR
1.20
USA
GBP>USD
1.30
SWITZERLAND
GBP>CHF
1.22
AUSTRALIA
GBP>AUD
1.75
ENERGY DEALS Supplier Average annual bill Rate Contact
Ovo Energy £2,850 Fixed 0330 303 5063
Scottish Power £4,161 Fixed 0800 027 0072
Phone numbers provided will call through to theenergyshop.com switch support team. Source: theenergyshop.com — 0800 448 0205
SAVINGS ACCOUNTS
INSTANT ACCESS
Provider Account name Min deposit Interest rate Contact
Chase Chase Saver Account £0 1.5% chase.co.uk
Tandem Instant Access Saver £0 1.1% tandem.co.uk
Cynergy Bank Only Easy Access (Issue 49) £1 1.1% cynergybank.co.uk
NOTICE ACCOUNTS
Provider Account name Notice period Min deposit Interest rate Contact
United Trust Bank 200 Day Notice Account Issue 2 200 days £5,000 1.3% utbank.co.uk
Oaknorth Bank 120 Day Notice Account Issue 13 120 days £1 1.25% oaknorth.co.uk
Shawbrook Bank 120 Day Notice Personal Account Issue 52120 days £1,000 1.22% shawbrook.co.uk
FIXED-RATE BONDS
Provider Account name Term Min deposit Interest rate Contact
Zopa 1 Year Fixed Saver 1 year £1,000 1.81% zopa.com
SmartSaver 2 Year Fixed Saver 2 years £10,000 2.16% smartsavebank.co.uk
SmartSaver 3 Year Fixed Saver 3 years £10,000 2.2% smartsavebank.co.uk
DEALS ARE LISTED ONLY IF THEY ARE COVERED BY THE UK FINANCIAL SERVICES COMPENSATION SCHEME (FSCS) OR A EUROPEAN EQUIVALENT MUST HOLD A CURRENT ACCOUNT WITH THE PROVIDER
Source: savingschampion.co.uk — 0808 178 5354
MORTGAGES
2-YEAR FIXED RATES
Lender Rate Scheme Deposit Fee Notes Contact
Barclays 1.94% Fixed to 31.05.24 40% £999 LV 0333 202 7580
Allied Irish 2.1% Fixed to 31.05.24 15% £0 L 02890 479 221
Nationwide 2.19% Fixed for 2 years 15% £999 RS 0800 302 010
3-YEAR FIXED RATES
Nationwide 2.14% Fixed for 3 years 15% £999 PV 0800 302 010
LONG-TERM FIXED RATES
Coventry 2.45% Fixed to 31.08.27 10% £999 LV 0800 121 8899
TRACKERS / DISCOUNTS
Skipton 1.39% Tracker + 0.64% for 2 years 40% £995 ELV 0345 850 1755
Skipton 1.65% Tracker + 0.90% for 2 years 10% £995 ELV 0345 850 1755
Newbury BS 1.69% 2.26% discount for 5 years 25% £850 LV 01633 555 5777
First Direct 2.69% Tracker+1.94% for term 25% £490 ELV 0800 482 448
FIRST-TIME BUYER / LOW DEPOSIT
Barclays 2.63% Fixed to 31.05.24 5% £0 PV 0333 202 7580
Santander 2.99% Fixed to 02.07.27 5% £0 NPV 0800 068 6064
Nationwide 2.19% Fixed for 5 years 25% £999 FHPV 0800 302 010
BUY TO LET
Skipton 1.53% Tracker +0.78% for 2 years 40% £995 ELV 0345 850 1755
Leeds BS 1.92% Fixed to 31.07.24 40% £999 OV 0345 045 4049
HSBC 2.29% Fixed to 31.07.27 25% £1,999 RS 0800 494 999
Early repayment charge applies unless otherwise stated. Most deals track Bank of England base rate.
C = £500 cashback for purchases; E = No early repayment charge; F = £500 cashback for first-time buyers; H = Help to Buy;
L = Free legal work for remortgages; M = £300 cashback for purchases; N = £250 cash back for purchases; O = £250 cash back;
P = Purchases only; R - Free legal work and valuation for remortgages; S = Remortgage only; V = Free valuation
Source: landc.co.uk — 0800 373 300
CURRENT ACCOUNTS
CREDIT INTEREST
Provider Account name Account fee Reward Balance (for reward) Contact
Halifax Reward Current Account None £5 a month – 0345 720 3040
TSB Spend & Save None £5 a month – 0345 975 8758
Virgin Money M Plus Account None 2.02% AER Up to £1,000 0800 678 3654
OVERDRAFTS
Provider Account name Account fee Interest rate^1 0% overdraft limit Contact
Starling Bank Current Account None 15% £0 starlingbank.com
First Direct 1st Account None 39.9% £250 0345 600 2424
Virgin Money M Plus Account None 19.9% £0 0800 678 3654
(^1) Equivalent annual rate.

Based on overdraft of £500 for 7 days a month.
Some accounts require minimum funding/direct debits to open or receive rates shown.
Source: moneyfacts.co.uk
Table shows the cheapest fixed tariff now available
from the cheapest suppliers. Excludes tariffs of less
than 12 months’ duration, tariffs that do not have
national coverage and tariffs where payments are
taken in advance of supply. Variable rate tariffs are
set by Ofgem’s price cap and may be lower.
10%
Of female
investors started
in the past year
Investor has found. It tracked
the performance of its
investors over the past two
years, since the first Covid
cases emerged, and found
that the youngest group,
aged 18-24, had enjoyed the
highest returns.
They averaged 22.8 per
cent, marginally better than
35 to 44-year-olds. Those
aged 55-64 had returns of
14 per cent, and it was 12 per
cent for the over-65s.
Interactive Investor found
that younger investors put
about a third of their money
into investment trusts, which
is higher than average. The
trusts that were popular
among all age categories
were Scottish Mortgage and
Alliance Trust, which were in
the top three holdings for the
18-24 age group. The third
most popular holding was
Fundsmith Equity.
When Hallam started, she
invested in a tracker fund and
opened a stocks and shares
Isa. Tracker funds follow an
index made up of a group of
companies. “I’ve got my
emergency fund in cash in my
The Break, two years ago
aiming to make personal
finance accessible to
millennial women.
“It’s important not to get
swayed by one person’s view
of what they think is a good
investment,” Nair said.
“Look at a range of videos
and pick out the common
themes and stocks that have
been mentioned, then look
more into the stock by
googling and reading articles
to understand the whole
picture. When choosing
companies, I made sure I
aligned with the brand.
“With Disney I am a big
fan of ventures such as the
Disney+ expansion and their
film franchises. With
Microsoft, Apple and JP
Morgan I looked at their
history. They’ve grown well
over the years, and have a
good business model and a
well-known brand name. Visa
was a bit more speculative,
but with society becoming
more cashless I thought it
would be a good hold.”
Most of the stocks in which
Nair invested have done well,
growing her £250 to £1,000.
Her one flop was Cineworld,
which shot up 392 per cent
between October 2020 and
March 2021 but has since
fallen 73 per cent.
As well as taking advice
from YouTubers, albeit with
caution, first-time female
investors are looking to social
media more widely for an
education in investing.
The SEO consultant Verena
Hallam was so inspired by
what she saw on social media,
she decided to document her
personal finance journey on
an Instagram account,
@survivingtosaving.
Hallam has had a difficult
relationship with money in
the past. She struggled with
emotional spending
exacerbated by ADHD, and
began investing only in July
after paying off her £34,000
debt. At 32, she craved
financial security for her
retirement and decided to
invest through the Vanguard
trading platform.
Young people are doing
remarkably well in investing,
the platform Interactive
The new
way to
invest —
just click
on to
YouTube
With spare time — and
cash — new investors
have thrived over the
past two years, writes
Yasmin Choudhury
A
fter lockdown took
away Remina Nair’s
opportunities to go out
and spend, she found
herself with a lot more
disposable income to play
with and a lot more time on
her hands.
The 28-year-old found
herself on YouTube watching
“how to start investing”
videos. It looked simple, so
Nair put £250 into the shares
of Microsoft, Apple, Disney,
JP Morgan and Visa.
She did not know it, but
she was joining a wave of
female first-time investors
who got started during the
pandemic. In a survey of
1,000 investors, the funds
and pensions company
Fidelity found that 10 per cent
of female investors had
started in the past 12 months,
and 14 per cent within the
past two years.
More new investors rely
on the internet to influence
their decisions. Another
study of 1,000 investors by
the retirement specialist
Charles Schwab found that
52 per cent were influenced
by online blogs and forums
and 52 per cent by credit
trading apps, while 51 per
cent said they used Google
to find financial advice and
share tips.
When Nair, from Harrow
in London, chose to invest
using the trading platform
Freetrade, she had done her
research. She was very wary
of relying on online videos,
but found the YouTuber
Patricia Bright’s advice for
beginners helpful in breaking
down financial terminology.
Bright, who started by
uploading videos about
fashion, beauty and hair on
a YouTube channel that now
has 2.85 million subscribers,
previously worked as a
financial consultant. She
launched a YouTube channel,
she bought NFTs. These are
non-fungible tokens that hold
data including photos, videos
and audio and can be sold
and traded.
Datta bought four NFT
passes at $300 each on the
NFT platform Recur. The
main marketplace for NFTs is
another platform, OpenSea.
The passes act as a key that
gives the owner exclusive
access to sales of other NFTs
and are partnered with
brands such as Hello Kitty
and SpongeBob SquarePants.
The passes were available to
buy for 24 hours and will
never be sold again except by
their new owners.
As they rose in value to
$900 each Datta was tempted
to sell, but on the advice of
friends she chose not to and
waited for the prices to rise
further. They fell to $450
each, however, leaving Datta
feeling deflated.
The sobering experience
showed the east Londoner
the importance of not
getting too caught up in the
excitement when things are
going well. “It’s scary
handling all that money, but
because it’s on a screen it can
sometimes seem like
Monopoly money,” she says.
“I feel like maybe there was
a stage where I was a bit too
risky, and if a friend bought
something I would want to
buy it too because I had a fear
of missing out.
“But you’ve got to do your
own research and think
about the risks.”
For many first-time
investors, index funds are
seen as a safe and simple
place to start because they
help you to diversify your
portfolio without buying
individual stocks. With index
funds, you do not have to
directly manage your
investment and make those
buy, sell or hold decisions.
current account and a savings
account. I would never invest
that, but other than those six
months I have in expenses,
everything is in the market,”
Hallam said. “I’m invested
for the long term and in
diversified funds so I don’t
consider it too risky. And I’m
not planning on taking that
money out for the next ten
years minimum.”
Risking capital is
something Rohini Datta has
had to come to grips with
recently. She found herself
responsible for the largest
sum of money she had ever
received in March 2020 —
a £10,000 inheritance after
her grandmother died of
Covid.
Guided by her father and
friends, the 22-year-old
decided to join the ever
growing number of female
investors. The investment
platform AJ Bell Youinvest
said that the number of
accounts opened by women
rose 54 per cent from 2019 to
2020, and 63 per cent from
2020 to 2021.
Datta used Hargreaves
Lansdown to split her money
between several companies,
including the homeware
shop Dunelm and the AI
cybersecurity company
Darktrace. She invested in
Dunelm after reading in the
Investors’ Chronicle that its
share price had been steadily
rising since March 2020,
jumping 100 per cent by
September.
Datta’s job managing AI
projects guided her when
Remina Nair,
left, Rohini Datta
and Verena
Hallam, right,
have all started
investing since
March 2020
CREDIT CARDS
INTRODUCTORY RATES
Provider Card type Introductory purchase APR^1 Reward Contact
Barclaycard Platinum All-rounder V 0% for 24 months 21.9% No 0800 151 0900
Sainsbury’s Bank Dual Offer MC 0% for 24 months 21.9% Yes 08085 405 060
M&S Bank Shopping Offer Plus MC 0% for 24 months 21.9% Yes 0800 997996
BALANCE TRANSFERS
Provider Card type Introductory purchase Transfer fee^2 APR^1 Contact
HSBC Balance Transfer V 0% for 33 months 2.7% (min £5) 21.9% 03457 404 404
Sainsbury’s Bank Balance Transfer MC 0% for 32 months 2.24% (min £3) 21.9% 08085 405 060
M&S Bank CC Transfer Plus Offer MC 0% for 32 months 1.99% (min £5) 21.9% 0800 997996
CASHBACK CARDS
Provider Card type APR^1 Cashback Contact
American Express Platinum Cashback 30% 0.75%-1.25%. Intro 5% for 3 months 0800 917 8047
American Express Platinum Cashback Everyday 24.7% 0.5%-1%. Intro 5% for 3 months 0800 917 8047
Halifax Cashback MC 19.9% 0.25-0.5% 0345 944 4555
1 APR = annual percentage rate, dependent on credit rating.^2 Fee charged on the amount of each balance transfer during the introductory period.
Source: moneyfacts.co.uk

The Sunday Times - UK (2022-04-10)

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