Of course the dominating news this week has been confirmation of the Bank of England base rate rise. However, before this happy announcement which all articles at the weekend agreed was actually set to happen this time, there was some other savings news.
As featured in our newsletter last week, a number of the weekend press covered the story about the FCA’s suggestion to introduce a basic savings rate. All the articles are just as suspicious as we are about how effective this might be if it does actually come to fruition. In The Mail on Sunday, Jeff Prestridge worries that “the introduction of such a rate may make savers more complacent than they are already because they could think basic rate means fair rate”
And, as our very own Susan Hannums pointed out in the Sunday Express, what would actually help is to simplify and standardise the switching process of savings accounts. She said “It feels like a hassle and many providers make it tricky with different applications and processes that put savers off”. Well our Ask Anna this week tackles this very subject.
Do you remember the damp squib that was the launch of the Lifetime ISA (LISA), back in April 2017? Well, the Financial Times last weekend reported on a proposal from the Treasury select committee, for the LISA to be scrapped. The committee accused the government of not making it clear enough that those withdrawing their money early will lose not only their 25p% bonus but also a fraction of their capital. And former pensions minister, Ros Altmann said “it is, in my view, another mis-selling scandal waiting to happen”. If it is scrapped, what this will mean for those who have already opened a LISA, is not clear.
Press coverage of the Peer to Peer lending market has been a bit quieter lately, but there were a couple of articles that looked at this area at the weekend.
The Times’ David Byers wrote that the FCA is to crack down on peer-to-peer lending due to concerns that investors are not always fully aware of the risks. The article pointed out that the FCA is concerned that parts of the industry are ill-equipped to cope with a future economic slump or an era of rising interest rates – a concern we’ve always had!
Adam Williams from The Telegraph took a look at the pros and cons of peer-to-peer investing. He points out that there are no industry standards and different providers assess creditworthiness of borrowers in different ways. But as well as the warnings he also gives five top tips for peer-to-peer investors.
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