As the country wakes up to a grey, drizzly morning, news from Moneyfacts paint a gloomy picture for savers. According to the financial analysts, low interest rates and changes to savings taxation are resulting in ‘perhaps the worst Isa season on record’.
In the run-up to the end of the tax year, banks and building societies tend to improve their rates in an attempt to attract savers to the tax-free products. But Moneyfacts says that the best easy-access Isa rate is 1.41 per cent, compared to the top rate of 3.15 per cent available five years ago.
As for savings in general, there are fears that George Osborne’s overhaul of the savings tax regime will cause mass chaos when new rules are introduced next month. The Chancellor is introducing the personal savings allowance (PSA). This will enable basic rate taxpayers to earn up to £1,000 of income from savings tax-free. Higher rate taxpayers will be allowed to earn up to £500 of savings free of income tax.
But new research from AA Financial Services reveals that 90 per cent of savers don’t know what the allowance is and are struggling to determine where to put their savings after April 6.
And there’s bad news for homebuyers as new research reveals that management companies are hiking maintenance charges and ground rent fees. The insurer Direct Line for Business reports that property charges have soared to an average of £2,777 a year for new builds. Unsurprisingly, some of the worst service charges are attached to new apartment blocks lining the River Thames in London, where residents will have to pay a whopping £7,000 a year on a two-bed flat.
Meanwhile, the Council of Mortgage Lenders says today that the buy-to-let mortgage lending market is likely to see a drop as tax changes come in which make investing in the sector less attractive. From next month, most landlords will pay a 3 per cent surcharge on stamp duty on property purchases. ‘I suspect there will be a lot of people at the margins who decide they should invest eleswhere,’ says director general of the CML, Paul Smee.
But many homeowners are in a sunny mood thanks to the lowest mortgage rates on record. According to the Bank of England, interest rates are at their lowest since the Old Lady of Threadneedle Street began collecting the figures eight years ago. Average interest rates on residential home loans stood at 2.71 per cent in the final three months of last year, less than half the cost of borrowing when officials first published the data in 2008.
Property millionaires, meanwhile, are splashing the cash. Analysis of Land Registry data from retirement lending advisory firm Bower Private Clients found that approximately a third of homes sold for £1 million or more have been paid for in cash over the last five years.
And, if the grizzly weather is getting you down, you might want to keep a close eye on your brolly. A study from Churchill Insurance found that one in ten people have stolen an umbrella in the past year. And there’s food for thought in the fact that more than four million people were injured by an umbrella in the past 12 months.
Comments