The week in savings - w/e 29th October
Monday 25th October
Smartsave Bank increase its short-term fixed rates:
1 Year – 1.34% (3rd in market)
2 Year – 1.58% (4th)
Pennyworth Financial, who announced last month that they have completed the pre application checks for a banking licence, and are preparing to submit their licence application, launched their mobile app.
Coventry Building Society withdrew their easy access account from sale at close of business. Paying 0.65%, it had been a best buy. Also withdrawn was their Four Access Saver paying 0.55% and their easy access ISA (0.55%).
Tuesday 26th October
Castle Trust Bank withdrew their 1 Year Fixed ISA from sale to new customers, which had been a best buy at launch, paying 0.90%.
Close Brothers withdrew their 2 Year Fixed (1.55%), which had been 7th in market. However, they also made several other rate increases:
* 2 Year Fixed ISA – 1.20% (new best buy)
* 3 Year Fixed ISA – 1.25% (2nd)
* 5 Year Fixed ISA – 1.55% (2nd)
* 95 Day Notice – 1.05% (joint 4th)
GB Bank, announced that it has received its banking licence with restrictions. The firm, formerly known as Model T Finance and GBB, aims to lend £3bn over the next five years hopes to exit the mobilisation phase and launch fully in 2022.
Wednesday 27th October
The day was dominated by the budget but sadly, as expected, there was no good news for savers. In fact, with the Personal Savings, ISA, Junior ISA and Child Trust Fund allowances all frozen, it was actually a cut for savers with the Treasury’s figures budgeting an increased tax take of £25m from the freezing of allowances.
Secure Trust Bank launched new fixed rate bonds and improved their ISA and notice pricing:
* 1 Year Fixed – 1.25% (joint 11th)
* 2 Year Fixed – 1.50% (joint 7th)
* 3 Year Fixed – 1.70% (8th)
* 2 Year ISA – 1.15% (2nd)
* 3 Year ISA – 1.25% (joint 2nd)
* 5Year ISA – 1.45% (3rd)
* 90/60 Day Notice – 1.02%/0.85% (7th)
SmartSave Bank increased its longer-term fixed rates:
3 Year – 1.82% (new best buy)
5 Year – 2.01% (2nd)
With all eyes on the budget, NS&I's Q2 results (July - Sept) were released somewhat under the radar. Considering how little information was in them, they were hugely revealing. The savings giant saw growth of just £0.8bn in the quarter, following a net outflow of £0.2bn in Q1. This is versus a target for the year of £6bn (although they are permitted a range of £3bn - £6bn) so leaves them £5.4bn behind.
Given that Premium Bonds have grown by almost £7.2bn in the period, this means a net outflow from other products of £6.6bn. With NS&I giving two months’ notice for rate changes, and only five months of their financial year remaining, any rate changes will need to be made soon to impact their financial year.
Logically, a rate increase is needed asap to get them back on track for the year, so an announcement should be imminent. With Premium Bonds celebrating their 65th Anniversary next week, it could be the perfect time for NS&I to give their savers some good news. Let’s hope so.
Thursday 28th October
Friday 29th October
The quietest Friday in the market for some time was kicked off by Aldermore Bank, who increased their 1 Year Business Fixed to 1% (joint 3rd)
Coventry Building Society closed their fixed ISA range but launched a new 3 Year Fixed ISA paying 1% (outside top 10)
Paragon Bank reintroduced their triple access cash ISA at 0.65% (joint best buy)
In the final move of the week, Family Building Society withdrew their best buy easy access ‘Premium Saver’ from sale. This promotes Shawbrook Bank (0.62%) to the best buy spot.
It was a bad week for easy access savers with both Coventry and Family Building Society withdrawing their best buy accounts paying 0.65%, which promotes Shawbrook to top spot (0.62%). There's plenty of support below Shawbrook, at 0.60%, so there should be no immediate pressure for them to pull their rate but key will be whether another provider moves above 0.60%. If they do, expect Shawbrook to stay and possibly others to follow. If nobody moves, I expect Shawbrook will last no more than 7 - 10 days in pole position.
Elsewhere, there was good news for ISA savers with Close, Secure Trust and Paragon all improving rates and I expect to see more movements to ISA pricing this week in response. Long term savers also saw better rates with SmartSave improving 3 and 5 Year Fixed rates.
GB Bank announced it has been authorised with restrictions by the regulator but it is likely to be at least six months before we see them enter the market. However, it's good news for savers to see another bank moving successfully through the process.