The Sunday Times - UK (2022-05-22)

14 The Sunday Times May 22, 2022

MONEY

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 40 50 60 M&S Bank Shopping Offer Plus MC 0% for 24 months 21.9% Yes 0800 997 996

BALANCE TRANSFERS Provider Card type Introductory purchase Transfer fee^2 APR^1 Contact Virgin Money Balance Transfer MC 0% for 34 months 2.7% (no min) 21.9% 0800 389 2875 Halifax Longest 0% BT MC 0% for 34 months 2.89% (no min) 21.9% 0345 944 4555 Tesco Bank Clubcard Credit Card BT MC 0% for 33 months 2.59% (min £5) 21.9% 0345 300 4278

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

FIVE THINGS YOU NEED TO KNOW ABOUT... OFGEM’S MARKET STABILISATION CHARGE

THE

FIVER

5

1

This temporary charge, due to last until September, was introduced last month by Ofgem, the energy regulator, and means that energy suppliers are charged when they gain new customers from a rival, if wholesale energy prices have fallen below a certain level. The fee is paid to the customer’s former supplier to make up for some of the income they are losing.

2

Last week Ofgem made the charge more likely because firms will now have to pay it if wholesale prices drop 10 per cent below the wholesale element of the regulator’s price cap, down from 30 per cent. While wholesale prices are likely to remain high for a while, they are expected to fall eventually.

3

Ofgem’s change will make it a lot harder for you to benefit from lower prices because suppliers will be less likely to offer cheaper deals. Martin Lewis, the founder of the Money Saving Expert website, said the regulator was “selling consumers down a river”.

4

Ofgem has done this to protect suppliers that bought energy in advance in a sign that the regulator’s priority is to try to prevent more energy firms going bust (29 have gone since last August), rather than ensuring that consumers pay less for their energy.

5

Ofgem is also going to review its energy price cap every three months rather than every six, to reflect market movements.

Yasmin Choudhury

CASH ISAS INSTANT ACCESS Provider Account name Min deposit Interest Transfers in Contact Marcus Cash Isa £1 1.15% No marcus.co.uk Al Rayan Bank Instant Access Cash Isa Issue 3£50 1% Yes alrayanbank.co.uk FIXED RATE Provider Account name Term Min deposit Rate Transfers inContact Aldermore 1 Year Fixed Rate Cash Isa1 year £1,000 1.65% Yes aldermore.co.uk Castle Trust Bank 2 Year Fixed Rate e-Cash Isa2 years £1,000 2.11% No castletrust.co.uk

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 No minimum 3.02% 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
Coventry BS Junior Cash Isa (2) £1 2.45% Variable coventrybuildingsociety.co.uk
Family BS Cash Junior Isa (1) £3,000 2.4% Variable familybuildingsociety.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
1.18
USA
GBP>USD
1.25
SWITZERLAND
GBP>CHF
1.22
AUSTRALIA
GBP>AUD
1.78
ENERGY DEALS Supplier Average annual bill Rate Contact
British Gas £2,759 Fixed 0330 100 0056
Ovo Energy £2,790 Fixed 0330 303 5063
Scottish Power £3,157 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 No minimum 1.5% chase.co.uk
Al Rayan Bank Everyday Saver 2 £2,500 1.31% alrayanbank.co.uk
Gatehouse Bank Easy Access Account £1,000 1.3% gatehousebank.com
NOTICE ACCOUNTS
Provider Account name Notice period Min deposit Interest rate Contact
Oxbury 180 Day Notice Account Issue 1 180 days £1,000 1.65% oxbury.com
PCF Bank 180 Day Notice Account Issue 8 180 days £1,000 1.63% pcf.bank
OakNorth Bank 120 Day Notice Deposit Account Issue 16120 days £1 1.6% oaknorth.co.uk
FIXED-RATE BONDS
Provider Account name Term Min deposit Interest rate Contact
Vanquis 1 Year Fixed Bond 1 year £1,000 2.27% vanquissavings.co.uk
Market Harborough Fixed Term Bond 90 (30.6.24) 2 years £10,000 2.75% mhbs.co.uk
Ikano Bank Fixed 3 Year Saver Account 3 years £1,000 2.75% tandem.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
Allied irish 2.1% Fixed to 31.05.24 15% £0 L 02890 479 221
Cumberland 2.33% Fixed to 01.08.24 10% £999 LV 01228 403 141
Nationwide 2.89% Fixed for 2 years 5% £0 PV 0800 302 010
3-YEAR FIXED RATES
Nationwide 2.39% Fixed for 3 years 40% £999 LV 0800 302 010
Virgin 2.89% Fixed to 01.10.25 15% £0 R 0345 605 0500
Nationwide 2.79% Fixed for 3 years 10% £0 PV 0800 302 010
LONG-TERM FIXED RATES
Cumberland BS 2.26% Fixed for 3 years 40% £999 LV 01228 403 141
Lloyds 2.54% Fixed to 31.08.27 20% £999 RS 0800 738 3534
First Direct 2.79% Fixed for 5 years 10% £490 LV 0800 482 448
Lloyds 2.23% Fixed to 31.08.32 40% £999 RS 0800 783 3534
TRACKERS / DISCOUNTS
Skipton BS 1.79% Tracker + 0.79% for 2 years 40% £995 ELV 0345 850 1755
Skipton BS 2.3% Tracker + 1.3% for 2 years 10% £995 ELV 0345 850 1755
Newbury BS 1.84% 2.26% discount for 5 years 25% £850 LV 01633 555 5777
First Direct 2.94% Tracker+1.94% for term 25% £490 ELV 0800 482 448
FIRST-TIME BUYER / LOW DEPOSIT
Nationwide 2.99% Fixed for 2 years 5% £0 FV 0800 302 010
TSB 3.04% Fixed to 31.08.27 5% £995 FPV 0800 056 1088
Nationwide 2.64% Fixed for 5 years 25% £999 HPV 0800 302 010
BUY TO LET
Skipton BS 1.86% Tracker +0.86% for 2 years 40% £995 ELV 0345 850 1755
HSBC 2.19% Fixed to 31.07.24 40% £1,999 RS 0800 494 999
HSBC 2.49% 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.
buffer people had has been wiped out.”
Leeds Credit Union said there had
already been a rise in defaults on loans
and an increase in loan applications, and
its staff report of speaking to a growing
number of distressed customers.
Rathi is in Leeds to meet local council-
lors and representatives from the debt
advice charities Stepchange and Chris-
tians Against Poverty, and the independ-
ent advice charity Citizens Advice.
Again and again he will be told of peo-
ple struggling to make ends meet, includ-
ing those trying to hold down multiple
jobs, and families where both partners
work but can no longer cope with their
housing, energy, petrol and food costs.
The charities say there is little they can
do to help.
“We need to recognise that while you
can learn lessons from the past, actually,
we’re dealing with quite exceptional cir-
cumstances,” Rathi said. “This combina-
tion of weaker growth, potentially rising
unemployment, the inflation pressures
and specifically the issues around energy
and food prices — that’s not a combina-
tion of factors that has recent parallels.
We need to be quite open-minded and
creative about how we intervene and the
kind of solutions that we think about.”
The chancellor has issued a council tax
rebate worth £150 for households in
properties rated A to D, increased the
threshold at which people pay National
Insurance by £3,000 and will introduce a
£200 energy bill loan in October to
spread the costs of rising energy prices.
He is also considering one-off pay-
ments of between £300 and £600 to help
the worst-off households through the
warm home discount.
‘We can lend money
to families, but we can’t
tell them how to budget’
S
andy Sutton is on the phone,
patiently talking to someone
about their loan application.
“I can see it here on the
computer system,” she says.
“It’s still waiting to be proc-
essed.”
That’s clearly enough reas-
surance for the customer,
and so Sutton says goodbye.
Almost instantly, the phone rings again.
“Hello, Leeds Credit Union.” Sutton
smiles down the line. This time, she
explains that money will be in their
account later that day.
She looks over to where I sit in recep-
tion. “Unfortunately, some of our mem-
bers have nothing else,” Sutton says, who
turns to her diary to make a note to call
the customer back when the money has
arrived. The phone rings again. Sutton
answers as if it is the first of the day. It cer-
tainly won’t be the last — this is the front
line of the cost of living crisis.
Beyond Sutton’s desk at reception is
the small boardroom, and today there is a
visitor: Nikhil Rathi, the chief executive
of the Financial Conduct Authority
(FCA), the City regulator.
He has come to this half-empty former
council building on the edge of Leeds’s
city centre to hear how increasing energy
and food prices are hitting community
groups and mutual funds like this.
Rathi is here to listen. He nods along as
the credit union’s chief executive Paul
Kaye talks: “It’s the rising cost of living at
the same time as taxes are increasing.
People who were budgeting to end the
month on zero can’t manage and any
Imogen Tew
and I very much respect their right to
express those concerns. But we are now
better placed with a pay framework that
will support us for the future.”
The rising cost of living has heightened
concerns over buy now, pay later loans,
which allow users to delay payments or
split them into instalments. Nearly one in
ten have already used them to cover
essentials.
In February last year the FCA called for
buy now, pay later firms to be regulated
as a matter of urgency. A Treasury consul-
tation closed in January.
“It’s important that there is a proper
consumer protection framework around
it so consumers understand what they
are getting into,” Rathi said. “We are con-
cerned about people taking on debt that
they cannot afford to manage, and there
has been a risk with some forms of buy
now, pay later for that to happen.”
Another thorn in the regulator’s side is
the rise of cryptocurrencies. A crypto
market crash last week meant some inves-
tors lost 99 per cent of their assets. The
price of bitcoin, the most popular crypto-
currency, dropped 10 per cent in a day.
While Rathi acknowledges the poten-
tial benefits of the innovation of crypto
assets, he thinks consumers and regula-
tors need to be “realistic”.
“The value of many crypto assets is
exceptionally volatile. If you are consid-
ering putting money into these products,
you need to be ready to lose the entire
amount,” he said. “We need to be quite
clear that there won’t be compensation
available for losses.”
Listening to the experiences of those at
the coal face of the cost of living crisis,
Rathi is pensive, speaking only to ask fur-
ther questions. As the meeting comes to
an end, he changes gear, is lighthearted
and makes small talk.
On the way out, he thanks Sutton, who
for just a moment isn’t helping a cus-
tomer. As he heads out of the door the
phone rings again.
“Hello, Leeds Credit Union.”
So what can the FCA do? Its main role
is to ensure that regulated firms treat cus-
tomers fairly and that consumers are pro-
tected from scams and rogue firms.
But for Leeds Credit Union there is one
change that would let it help customers.
“The people that need financial advice
are those that have not got a lot of
money,” Kaye said. “They need advice in
a slightly different way — how to budget,
how to save, have you got the best inter-
est rates, negotiating energy bills. It
would help our members navigate the
cost of living crisis.”
FCA rules don’t make it easy to offer
this kind of advice, though. A series of
mis-selling scandals, from pensions to
endowments, resulted in a crackdown
that means that no financial firm is
allowed to give tailored financial advice
without the correct qualifications and
doing a full risk analysis of that customer.
This means that credit union staff can-
not do something as simple as advising
someone to take out a cheaper loan or
offer help with budgeting for fear of
breaching FCA rules and being fined.
Rathi’s visit to Leeds comes a week
after the FCA’s chairman, Charles Ran-
dell, visited its neighbour Bradford.
It is an important part of the country
for the FCA, which plans to open an office
in Leeds.
As he looks to hire more staff, Rathi is
facing hostility from his present workers.
An overhaul of the pay structure at the
regulator has led to protests outside the
London office and staff to go on strike.
“We felt that the [changes] were very
important shifts in our culture,” Rathi
said. “Understandably, that has caused
concern for a small number of colleagues
Sandy Sutton,
receptionist at
Leeds Credit
Union, with the
company’s
chief executive,
Paul Kaye
750
People a day
referred to food
banks by Citizens
Advice in May
9%
of people have
used buy now,
pay later to cover
essentials
ANDREW MCCAREN FOR THE SUNDAY TIMES

The Sunday Times - UK (2022-05-22)

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