More evidence today of a cooling in the annual rate of UK house price growth. According to the Nationwide Building Society, the annual rate of house price growth was 4.7 per cent in May, down from 4.9 per cent in April and 5.7 per cent in March.
However, in May alone, house prices rose by 0.2 per cent, the same as the previous month. Unsurprisingly, Britain’s biggest building society attributed much of the changes to the surge in house-buying in March ahead of new rules for stamp duty in April. Nationwide chief economist Robert Gardner said: ‘House purchase activity is likely to fall in the months ahead, given the number of purchasers that brought forward transactions.’ Broadband price hike Money Mail reports that customers on BT’s basic broadband deal will be hit with a 33 per cent price hike after one year. BT’s standard package is currently advertised at £13 a month, with a price rise scheduled for July 3 taking the monthly cost to £15.According to Money Mail, hidden in the terms and conditions it says that after a year the price will rise even further to £20 a month. On top of this there is a monthly £18.99 charge for line rental. That means anyone who fails to switch to a different deal when their 12-month contract ends will be left paying £38.99 a month for basic broadband.
Pension fears
The Daily Mail reports that hundreds of teetering pension programmes could be put at risk if a rescue fund is forced to bail out a troubled scheme for staff at Tata Steel. The Government is seeking a solution to keep the British Steel scheme – which is now backed by struggling Tata – out of the Pension Protection Fund.
In other retirement news, Aegon claims that pensions are being increasingly targeted by fraudsters. The financial services company says that scammers are persuading more savers to transfer their pensions to unsafe schemes. Kate Smith, head of pensions at Aegon, said: ‘With the number of scams doubling in the past six months pensions have become a honey pot for fraudsters as they attempt to persuade savers to part with their hard-earned pensions. It takes years to build up a decent sized pension pot, but can take minutes for it to disappear if people fall victim to fraudsters.’
She added: ‘Fraudsters are using different tactics to get hold of your pensions, often starting with a cold call. Common tactics include offering to ‘liberate’ your pension by transferring it away from a genuine pension scheme to one that allows you to cash in your pension before age 55. Another common tactic is to move your pension overseas, commonly to Malta or Hong Kong, promising that doing so can double your money in ten years’ time.
‘Scammers fail to mention that accessing your pension before age 55 breaks the tax laws risking a 55 per cent tax penalty and that transferring your pension overseas when there is no intention to live abroad can also lead to a similar tax penalty.’
Premium Bonds
The prize rate of Premium Bonds is being cut to 1.25 per cent from today. Calum Bennie, savings expert at Scottish Friendly, commented: ‘With the Bank of England continuing to sound a dovish tone on when we can expect interest rates to rise, this decision by NS&I should come as no surprise to anyone. For years now savings rates have continued to plunge to almost derisory levels.‘The move by NS&I will only encourage more providers of cash savings accounts to follow suit. With the outlook for interest rates looking like they will remain at rock bottom, savers should continue positioning themselves to offset meagre returns on cash. Those looking to prepare for their financial future, should seek alternatives to help their money grow over the long-term. Stocks and shares ISAs provide one opportunity for savers to get better returns on their cash, although risk is attached.’
Mortgages
Thousands of homeowners could be caught in a mortgage insurance trap. That’s according to comparison site Gocompare.com which says that 1.6 million homeowners have bought home insurance from their lender and many mistakenly believe they cannot switch for a better deal.
A new survey of homeowners who bought their mortgage lender’s home insurance reveals that 30 per cent of households believe their home has to be insured with their mortgage lender as a condition of the loan while 6 per cent were told by their lender that it was a mandatory purchase. Nearly a quarter think switching away from their lender’s insurance will invalidate their mortgage.
Finally, Labour’s deputy leader has urged David Cameron to ban hedge funds from trying to cash in on the EU referendum by commissioning private exit polls to speculate on sterling before the official result. Tom Watson said it was not right that financial institutions are looking to make quick money out of betting on the UK’s currency, as British voters make their most significant political choice in a generation.
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