| | | - Historic 0.25% low signals new era of rate changes
- Protect YOUR money, earn up to 6% savings
- Which mortgage rates will drop & should you ditch your fix?
The Bank of England cut the benchmark base rate from 0.5% to 0.25% last week - after seven years of no change. It also hinted the rate may fall again this year and cut its growth forecast for the UK economy.  Whatever the future, it's vital you take charge of your money NOW. Sadly, dire savings rates will get worse - yet decent returns are possible on non-standard savings deals. On mortgages, some rates will fall but don't automatically stay put. Here's the lowdown.
Earn 24 times the base rate - up to 6% savings | | | | | | Savings rates are likely to be slashed en masse unless you're protected by having a fix - see our bank-by-bank breakdown of cuts. So it's the PERFECT trigger time to ditch poor-paying accounts.
Our savings fountain explains which type of account is best for you, if new to savings. If you know what you want, we've the top deals below (all have UK savings protection). Be warned: banks could chop rates on ANY account, so double-check before applying, and be prepared to switch again if variable rates dive later: | | | | | • | Earn 5% via current accounts. These smash easy-access savings and 76% in our July Twitter poll said switching bank was hassle-free. The competition regulator yesterday announced plans to aid switching, such as personalised comparisons, but that's years off so don't wait - there are plenty of good deals NOW. Rates below are variable so aren't immune from cuts, unless stated.
- Bigger savers can earn 3%: Santander 123* pays 3% AER if you've £3k to £20k. Its £5/mth fee is covered for most by up-to-3% bills cashback (min £500/mth pay-in). Couples can have three accounts covering £60k (one each & a joint). If Santander cuts the rate (it's "under review"), see if Santander 123 would still be worth it.
- Up to 5% for smaller savings: TSB* pays 5% AER on up to £2k, plus you can get up to £5/mth cashback on contactless card spending (£500/mth pay-in). Nationwide FlexDirect* is 5% AER fixed for a year on up to £2,500, 1% AER variable after (£1,000/mth pay-in), while Club Lloyds pays 4% AER on £4k to £5k (£1,500/mth pay-in).
- Will I get them? You must pass a credit check and usually have a couple of direct debits going out. Full info & eligibility in interest-paying accounts, or see £150 bank switch bonuses. | | | | | • | Earn up to 6% with regular savings. They pay high interest but on small sums, usually for a short time, though you must meet min & max monthly deposits. Rates are fixed for a year, so are immune from cuts once you've got the account, unless stated.
- Top payers are 'bank-linked': You need a specific current account for them - luckily these tend to be best buys. First Direct's current account gives switchers £100 and is no.1 for service, plus its linked regular saver lets you save up to £300 a month at 6% fixed. Others are M&S Bank (6%) and Nationwide (5%, though this is variable).
- 2.05% for anyone: The top open-to-all deal is Furness BS at 2.05% AER variable, on up to £250/mth. Full info in Top Regular Savings. | | | | • | Help to Buy ISAs: Up to £3k FREE for first-time buyers. If you're 16+ and have never owned a home and may want to, they're usually a no-brainer. Open-to-all accounts pay up to 2.5% interest and 25% is added by the state, up to £3k, if used towards a deposit on homes up to £250k (£450k in London). While the rate is variable, the bonus percentage and cap is fixed. Full info: Help to Buy ISAs. | | | | • | Up to 1.85% in fixed savings. These beat up to 1.45% easy-access savings & the rate is fixed, but you can't withdraw early.
- Top 1yr is United Trust's 1.5% AER (min £500). Bank of Cyprus UK is top for 2yrs at 1.75% AER (£10k); 3 yrs at 1.85% AER (£10k). Full best buys & help in Top Fixed-Rate Savings. | | | | | Max your mortgage - incl should you ditch your fix? | | | | | | Some will see mortgages get cheaper after the base rate cut. Whatever the impact, if coming to the end of your fix or tracker, pounce on a new deal as your rate will likely rocket soon - you can usually do this three months ahead. If looking for a new deal, whatever the reason, see our Remortgage PDF Guide or First-time Buyers' PDF Guide for help, plus our Mortgage Best-Buys Comparison for the top deals. | | | | | • | Fixes are fixed - check if you'll save ditching yours. They account for half of mortgages, and as the name suggests, rates WON'T change during the fixed period. That doesn't mean doing nothing.
Use our Ditch your fix? tool to check if you can save by switching from a pricey fix. For example, if you've a 3.49% fix with 23mths left on a £100,000 mortgage, you could save if you can switch to anything better than a 1.51% fix with a £1,000 arrangement fee, even taking into account £2,800ish extra switching fees. It won't work for all, so check via the tool. | | | | • | Will your lender cut your standard variable rate (SVR) or 'discount'? These move at lenders' whim. See our lender-by-lender update on which have announced cuts - sadly, only half have so far confirmed their plans, we'll update the list as we know more.
SVRs, which average 4.8%, are pricey, so don't automatically stick even if your rate is cut. You'll usually be on an SVR when your fix or tracker ends. A 'discount' follows the SVR at a set rate, eg, if the SVR is 4% and the rate is SVR minus 1%, it's 3%. See SVR Help. | | | | • | Check when your tracker will fall. These 'track' the base rate, so for the 1.5 million on them, mortgage costs should drop by an average £20/mth on a typical £150k mortgage. See our lender-by-lender update for when each plans to cut the rate. Most will be from Sept but some, such as Virgin, will make customers wait till Oct.
A tiny number won't see rates drop where their deal has what's called a 'collar', which prevents rates falling below a certain level. You should be contacted by your lender if you're impacted. | | | | • | I'm looking for a mortgage - should I wait for cuts? Rates could fall a touch, though the Bank of Eng expects any will be limited.
Our message for months has been mortgage rates are ultra-low already. That hasn't changed, so why wait, especially if you've an offer? Also, if buying a new home, you risk losing it by dallying.
To highlight the low rates, HSBC launched a 0.99% two-year fix in June, with a £1,499 fee if you've a 65% deposit/equity. It's still here and is as low as we've seen. | | | | • | More tips and calcs. You need a good credit history (see Boost Your Credit Score Tips) to get most mortgages and typically a deposit or equity of at least 60% of the value for the best, and 5% for anything at all. Also try our Ultimate Mortgage Calc, incl...
Basic Mortgage Calc | Compare Two Mortgages | Mortgage Overpay Calc | Compare Fixed Mortgages | Ditch Your Current Fix? | | | It doesn't stop at mortgages and savings - here's a Q&A on other hot topics you've asked about... | | | | | Q. | Should I buy holiday money now? The pound has fallen in value, so you'll get fewer euros/dollars etc. Just before the base rate announcement, at 11.40am on Thu, £1 bought €1.19 and $1.33. At 5pm yesterday £1 bought €1.17 and $1.30. No one knows how currencies will move but we've a trick to protect against swings.
For near-perfect rates worldwide, specialist credit cards don't charge the typical 3% 'load' most cards do. Halifax Clarity (eligibility calc / apply*) has good feedback, is a Mastercard (so usually gives best rates) & has low ATM fees. Creation (apply*) is similar, with cheaper withdrawals, though we've little feedback (tell us). Spending is cheaper than withdrawing cash and always repay in full to minimise 18.9% and 12.9% rep APRs. See: Top Travel Cards (APR Examples).
For cash, our TravelMoneyMax holiday money comparison tool finds the cheapest near you. The app (iPhone or Android) does the same and can store your card details to show your cheapest way to pay. | | | | | Q. | Will cheapest-ever loan rates fall further? If you have one, your rate is almost certainly fixed. For new loans, rates from 3.2% are already at record lows, driven by strong competition. So there's not much further to drop, and as with mortgages, there may be little point waiting.
If you're looking for a loan, all providers credit-score you, so use our free Loans Eligibility Calc to find which you've the best chance of getting and see our Cheap Loans guide for the top deals. | | | | Q. | Will credit card rates drop? With a few exceptions, they're unlikely to move as they're less linked to the base rate. More importantly, if you're paying any interest at all on your credit card... STOP. See below for how you can cut your rate to 0% for 3yrs+. | | | | Q. | Will overdraft costs fall? For those in the red, there's probably no good news - overdraft rates are unlikely to move as they're not linked to the base rate. Instead, see how to cut overdraft costs. | | | | Q. | Will it affect my student loan? If you started uni from 1998-2011 in Eng and Wales, or any time from 1998 in Scot or NI, it's likely your interest rate will rise in Sep to 1.25% from 0.9% (it would likely have been 1.5% without the rate cut). See Student Loan Help. | | | | Q. | Should I pay off debt instead of saving? With rates at all-time lows those with debts AND savings could consider paying debt off with savings where the debt interest is higher than the after-tax savings rate. Full pros and cons in repay debts with savings. | | | |
PS from Martin: After 13yrs writing this email, I'm taking a month's sabbatical - to have fun and be a husband & daddy. So this August the email's in the very talented hands of the MSE team. | | | | | | | | | | | | | | | | | | You can now be pre-approved for more cards. See if you can slash £100s or even £1,000s off existing debt costs
We boosted our Balance Transfer Eligibility Calc earlier this year so you could see on a few MBNA cards if you've a '100% chance' of getting them (subject to ID/fraud checks). Now we've gone further as you can be pre-approved for most Virgin Money cards too - and it has the longest 0% balance transfer card, at 41mths. A balance transfer pays off existing credit and store cards, so you owe it instead, but at 0%. Repayments clear the debt rather than just paying interest, so you're debt-free quicker. What is our eligibility calc? Applying marks your credit file, so to avoid this, our eligibility calc shows which you've best odds of getting, letting you minimise applications. | TOP 0% Balance transfer cards | 0% deal (REP APR AFTER 0% ENDS) | ONE-OFF FEE | | Virgin (eligibility calc / apply*) - longest 0% + pre-approval check | 41mths 0% (20.9%) | 4% (min £3) | | Halifax (eligibility calc / apply*) - long 0%, lower fee, but 'up to' 40mths | Up to 40mths 0% (18.9%) | 2.46% | | Tesco Bank (apply*) - cheapest 40mths 0% that's not an 'up-to' | 40mths 0% (20.6%) | 2.69% | | MBNA (eligibility calc / apply*) - higher fee, 'up to' + pre-approval | Up to 40mths 0% (20.9%) | 2.79% | | Barclaycard (eligibility calc / apply*) - long, low-fee 0% deal | Up to 37mths 0% (18.9%) | 1.5% | | Virgin (eligibility calc / apply*) - long, low-fee 0% that isn't an 'up-to' & now has pre-approval check | 32mths 0% (19.9%) | 0.99% (min £3) | | Tesco Bank (apply*) - longest NO-FEE 0% | 24mths 0% (20.6%) | NONE |
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Tip 1: Go for the lowest fee in the time you're sure you can repay. Most 0% cards charge a fee to transfer your balance, eg, 4% is £40 per £1,000 shifted. So calculate how long you'll take to clear the debt, add a bit for safety, then pick the lowest fee within that time. Unsure? Play safe and go long, even with a bigger fee. -
Tip 2: Some are 'up to' 0%s, so you may get a shorter deal. That's why we include the best non 'up-to' options. If the eligibility calc suggests you've good odds of getting these, unlike the 'up-tos', you know what you'll get. -
Balance Transfer Golden Rules. Full help, get cashback & ALL best buys: Balance Transfers (APR Examples).
a) Never miss the min-monthly repayment, or you could lose the 0% deal and it'll cost far more.
b) Clear the card or balance-transfer again before the 0% ends, or the rate rockets to the higher APR.
c) Don't spend/withdraw cash on these. It usually isn't at the cheap rate and cash withdrawals hit your credit file. PS. You can now be pre-approved for Aqua cards too, but none of its cards are for debt-shifters. | | | | | | | | | | | | | | | Beat soaring costs and lock in a quote for cheap cover now, even if you're not at renewal
However you look at it, car insurance costs are up - by a whopping 17% on last year, the AA says (it also predicts they'll keep rising); or 10%, according to the Association of British Insurers trade body. But our system can help slash costs, as Sue found: "Last year I paid £258 car insurance. Renewal quote was £608 - I've paid £199 using your process. Thanks." See full info in Cheap Car Insurance, but to drive the points home... -
 You can cut costs now, even if not at renewal. There are two elements to this:
i) Renewal within 60 days? Some firms' quotes are valid for 60 days, so if prices rise you're covered. These include Aviva*, Nationwide & LV* (see 20 long quote insurers). Dimuthu tweeted: "Renewal £521. Quote a month ago, which was honoured, of £319. Thanks." Get quotes now, then check against others at renewal.
ii) Can you slash costs mid-policy? Use the info below to find your cheapest insurance. If it's much cheaper than now & you haven't claimed, for a £50-ish admin fee you can usually cancel your policy and get the rest of the year refunded (though you won't earn that year's no-claims bonus), locking in today's price. See full switching mid-policy info. Andy tweeted: "You gave us confidence to change mid-policy - it was £40/mth, now £16".
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Find your cheapest car cover. Cat did just that and told us: "Car insurance £200+ cheaper than renewal quote after using @MartinSLewis comparison combo". Full help in Cheap Car Insurance & Young Drivers' Insurance (for under-25s), but in brief...
i) Combine comparison sites. They don't cover the same insurers, so more sites give a wider spread. Our current order's Confused.com*, Gocompare*, CTM and MoneySup* (for why, see comparison order).
ii) Hot deals comparisons miss, incl free £60 M&S voucher. Some deals aren't on comparisons, eg, Age UK* offers a £60 M&S vch or Co-op* a £50 food vch - new custs only, vchs posted within 120 & 90 days. Plus big insurers Aviva* and Direct Line* are never listed on comparisons. See all hot deals comparisons miss.
iii) Counter-logical savings. Use trial & error to see if comprehensive's cheaper than 3rd party, whether adding drivers slashes costs & if tweaking your job description saves ££s. Plus paying monthly is a loan - we've seen APRs as high as 101%, so it's better to use a 0% spending card, or pay upfront if you can. -
Don't want to switch insurer? Haggle. This works best at renewal. Simply find the best price you can, then ask your provider to beat or match it. Nick tweeted: "Car insurance renewal letter says £397, comparison site best price £193 with same company. It matched. Result." | | | | | Discounted designer sunnies 20% off code, eg, £98 Ray-Bans £57. MSE Blagged. Ltd stock. Sunnies
Updated: 120 things to do with the kids in summer, now incl 'free' swimming. Inspired by Adam Peaty's Olympic gold, we've rounded up the latest deals to save you splashing out, including free swims for all ages, kids eat free and £1 for a 100-day Kids Pass. Kids' treats
£11 Havaianas code (norm £18ish). MSE Blagged. Via 10% off discounted flip-flops code, free deliv. Rubbersole
SUCCESS OF THE WEEK: (Send us yours on this or any topic)
"After seeing your email last week, I used your Easyjet refund trick for flights to Menorca. We managed to get an £803 voucher, all thanks to your website."
Olympic-inspired deals, eg, get PAID to walk, FREE gyms. Plus free bootcamps, yoga & pilates. Fitness deals
Got an old Oyster card lying around? You could be owed a share of £223m. Check now. TfL Refunds | | | | | They can get this email free every week | | | | | | | | | Master the art of entering contests as a cash-boosting hobby - how to max gains & make winning ways automatic
This week alone, MoneySavers in our forum have won £4,500-worth of caravan accessories, £1,000 in cash and a Greek island holiday. It's all about 'comping', a potentially profitable hobby. See 44 Comping Tips - here's some winspiration: -
 100s of competitions in one place. It's not just about entering the odd contest, it's a systematic way of sourcing and entering loads of the right ones. In the MSE comping forum board compers post hundreds of contests, enter others' competitions and cheer when people win, bringing the hobby to life.
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Turbo-charge your comping. Use web gadgets to form-fill at speed and generate tie-breakers, plus we've loads more tools.
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Chat for prizes & get lucky on social media. A Whatsapp-style messaging app enters you for cash prizes of up to £10k. Or see how to find & enter comps on Facebook & Twitter & snap-sharing sites Instagram & Pinterest. -
Another HUGE comping win. While big success isn't certain, it happens - as forumite Nettie17 found two weeks ago: "I had a call from Capital FM to tell me I'd won a trip to the Olympics, with £2,000 spending money". Read the full story and heart-warming congrats that followed. | | | | | | | | | | | | | Should you be allowed to switch water company? Your supplier's currently decided by where you live, but regulator Ofwat's considering the costs and benefits of letting you switch - like with gas and electricity. It could mean combined energy and water bills, and cut costs. Feed back to Ofwat in the MSE forum - it'll present your views to the Government later this year. | | | | | | The MoneySavingExpert Annual Census. It's time for the MoneySavingExpert.com annual census. Find out who uses the UK's biggest consumer site - and what reality TV show they'd most like to star in. Take the MoneySavingExpert.com annual census here First Direct keeps its customer service crown. The results of our biannual banking poll from last week are in, with First Direct remaining solidly in first place - a whopping 91% of its customers who voted said it's 'great' for service. Barclays gets the wooden spoon, with 21% calling it 'poor'. Full ratings in our bank poll results. | | | | | | | | | | | | | | | | | | | | | | | | | | | Wed 10 Aug - Share Radio, 11.20am
Thu 11 Aug - BBC Radio Manchester, 4.50pm
Tue 16 Aug - BBC Radio Cambridgeshire, 2.20pm | | | | | | | Q: I've been awarded £649 compensation for a delayed flight with Thomas Cook but it offered this in vouchers, with a time limit. How do I change this to money in my bank? Steve, via email. MSE Megan's A: You simply need to tell it you want the compensation to be paid as cash. Under EU law 261/2004, which governs flight delay compensation, the airline can only pay you vouchers if you have signed an agreement to say so. Otherwise it must be by bank transfer or cheque. If you haven't signed anything to say you will accept the compensation as vouchers, write back and say how you would like the money to be paid instead. For further help and info, see our Flight Delays guide. Please suggest a question of the week (we can't reply to individual emails). | | | | | | | That's it for this week, but before we go, check out this thread from the forum: Forums or Fora? Pronunciation and plurals have long led to many a debate, with jazz legend Ella Fitzgerald even singing about potatoes and potahtoes. Martin himself was recently presented with such a quandary, when he was told it's not 'forums', but 'fora'. We'd like to put this to the test - with none other than our beloved MSE forumites. We hope you save some money,
The MSE team | | | | | | |
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