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The week in savings - w/e 7th November

 

Monday 1st November

Premium Bonds celebrated their 65th Birthday by announcing that their 469th and 470th £1m winners were both from Bristol and that the overall value of Bonds has surpassed £114bn - a new record

Redwood Bank have announced their intention to float on the stock market in 2023, having replaced all its independent non-executive directors in preparation for this.  The SME savings provider is part owned by Warrington Borough Council, who invested £30m in it prior to launch.

Coop Bank has bid £1bn for TSB, according to The Telegraph, as signs that we will see a wave of consolidation in the banking market strengthen, with Hampshire Trust Bank having recently agreed to buy Wesleyan Bank.

Talking of Wesleyan, they made the first move of the week by relaunching their fixed rate savings:
* 18 Months - 1.50% (3rd in market)
* 2 Year - 1.55% (7th)
* 3 Year - 1.80% (3rd)
* 4 Year - 1.80% (4th)
* 5 Year - 1.85% (6th)

Zopa increased their fixed savings rates in the afternoon:
* 1 Year - 1.35% (joint 2nd)
* 2 Year - 1.59% (4th)
* 3 Year - 1.70% (joint 8th)
* 4 Year - 1.71% (4th)
* 5 Year - 1.75% (7th)

Zopa were quickly followed by SmartSave Bank, who withdrew their 1, 3 and 5 Year Fixed from sale – the 3 Year having been best buy (replaced by JN Bank) and 5 Year was 2nd in market.

 

Tuesday 2nd November

Family Building Society withdrew their 90 Day Notice from sale, which had been best buy, and were replaced by Oxbury Bank at the top of our notice tables.

BLME cut their 1 Year Fixed Rate from 1.35% to 1.30% and fall to joint 5th in the tables

Kent Reliance withdrew their 1 Year Fixed Rate from sale, which was previously joint 3rd paying 1.33%.

 

Wednesday 3rd November

Oxbury Bank made several cuts to their pricing:
* 1 Year Fixed - down to 1.20% (now 8th)
* 120 Day Notice - 0.95% (joint 6th)
* 95 Day Notice - 0.90% (joint 6th)

United Trust Bank improved their long term fixed rate bonds and ISA fixed rates:
* 3 Year Fixed - 1.75% (joint 8th)
* 4 Year Fixed - 1.80% (joint 3rd)
* 5 Year Fixed - 1.85% (joint 5th)
* 3 Year ISA - 1.20% (6th)
* 5 Year ISA - 1.55% (joint 2nd)

Thursday 4th November

Hodge Bank increased their fixed rates:
* 2 Year Fixed - 1.55% (joint 8th)
* 3 Year Fixed - 1.70% (joint 10th)
* 5 Year Fixed - 1.80% (8th)

The Bank of England announced that Base Rate will stay at 0.10%, a record low, despite many predictions a rise was imminent.  However, with inflation forecast to go as high as 5%, it looks like only a temporary measure and the 7-2 split vote suggests it is purely a matter of time before we see a rise.  We expect this to come in January or February next year but savers shouldn’t get excited – we think the only people who will see the full impact of any increase is mortgage holders.

The Bank of England also published its monthly round up of authorised banks, which announced that TBOL UK Holdings had been authorised as a bank, obtaining its banking licence with restrictions.  This means it can hold up to £50,000 of savings in total, which allows it to complete building the bank – a period also known as mobilisation.  TBOL have gone completely under the radar so there is very little we can tell you about their plans at this point, but we will bring you more news when we can.

 

Friday 5th November

Shawbrook kicked the day off launching four new best buys:
* Easy Access - 0.67%
* 120 Day Notice - 1.08%
* Easy Access ISA - 0.67%
* 1 Year Fixed ISA - 0.93%

They also increased their fixed ISA range:
* 2 Year Fixed ISA - 1.16% (2nd)
* 3 Year Fixed ISA - 1.18% (7th)
* 5 Year Fixed ISA - 1.48% (4th)

However, Hampshire Trust quickly replaced them on 1 Year ISA, as they improved their fixed ISA rates:
* 1 Year Fixed - 0.95% (new best buy!)
* 2 Year Fixed - 1.16% (joint 2nd)
* 3 Year Fixed - 1.26% (2nd)

Ikano Bank entered our best buy tables for the first time this year, improving their 1 Year Fixed Rate to 1.25%, joining a clutch of providers in joint 8th position.

Coventry Building Society launched its annual Poppy Bond and ISA, supporting The Royal British Legion, with a 4 Year Fixed Bond and 4 Year Fixed ISA, both paying 1.20%.  Although neither product make our best buy tables, Coventry pays 0.20% of the balances held on 31st December to The Royal British Legion and are a nice way for savers who wish to support this very worthy cause, to do so while also earning a competitive rate.

 

Summary

Shawbrook’s moves on easy access and ISA accounts are welcome ones for savers.  They have around £8bn of savings so are a large enough bank to hold this pricing for at least two or three weeks.  It is likely driven by strong lending performance as it is one of the new entrants who have performed particularly well during and since Covid.

While it is unlikely that the 0.67% they are paying will be topped, it increases the likelihood that some of the providers grouped behind at 0.60% will breakout north of that price point.

With United Trust, Shawbrook and Hampshire all improving ISA rates, it is likely we will see a response to those moves this coming week and we are edging closer to 1% on 1 Year ISA.

I expect another calm week in the savings market but with more rate rises, as providers respond to the movements from the past week, and as we continue in the current environment of rates gently upticking.

 

Image by Nattanan Kanchanaprat from Pixabay 

About The Savings Guru

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