Smart Money - Latest blog from Paul Whitlock - Director of Savings

09 December 2015

Looking forward to 2016

As mortgage borrowers across the UK breathed a sigh of relief, savers took yet another blow last month with the Bank of England announcing that interest rates are to remain unchanged with a future rate rise looking unlikely any time soon.

For over six years, UK savers have been trapped in a low interest rate environment, struggling to achieve any notable returns on their nest eggs – especially those with savings languishing in high street accounts paying paltry rates of interest. Indeed, our recent research found that more than a fifth of UK adults are earning interest of 0.50% or less on their primary savings account.

The level of people’s disappointment at the Bank of England’s latest guidance was perhaps inevitable, especially when you consider that just 4 months ago it was Carney’s view that rates could rise as early as the end of this year. Following this latest postponement, however, the Governor has now been dubbed in some quarters as ‘the unreliable boyfriend’ or ‘the boy who cried wolf’.

There are a plethora of factors which influence the UK’s interest rate, and while the continuing growth of house prices initially made a rate hike appear more likely, ultimately volatility in the global financial markets and low inflation have prompted the Bank of England to err on the side of caution once more.

All eyes now turn to the US, where savers have been battling against a base rate of 0.25%. Just a couple of months ago, it looked like there would be a race for which major central bank would be first to increase rates. But with this latest deferment from the Bank of England– not to mention the European Central Bank suggesting they were prepared to cut rates – it appears the US Federal Reserve is now likely to be first out of the blocks in the interest rate race.

It’s not all doom and gloom for savers in the current environment though.

Low inflation means things like doing the weekly shop, putting petrol in our cars and even stocking up for Christmas can all cost less, which all adds up to having more money in our pockets and so we should all be able to spare a little more every month for our savings.

And if most savers are only getting rock-bottom rates offered by the mainstream providers, then many may feel compelled to hunt out the better deals that are available. Indeed, the low interest environment has magnified the benefits of increased competition from challenger banks, like Charter Savings Bank, and this increase of competition can only be a good thing for savers.

Read more

High Street banks – the modern day mattress for UK savers

02 December 2015

• More than an eighth (13%) of UK adults with savings are earning below 0.5% interest on their main savings account

• Average UK savings pot totals £8,500, equating to average annual interest of just £43 a year before tax, savers could earn four times as much with a challenger bank

New research from challenger bank, Charter Savings Bank, conducted in conjunction with YouGov, has found that more than an eighth (13%) of UK adults with savings are earning below 0.5% interest on their primary savings account, which is less than the base rate set by the Bank of England. The research shows that as a result of historically low interest rates, combined with poor High Street offerings, the average UK savings pot, now £8,500, could earn just £43 a year of annual interest.

These ‘modern day mattress savers’ are earning only slightly more in interest than the 174,000 UK adults who keep their savings in an unsecured place, such as under real mattresses or in shoe boxes. To give an idea of the scale, the Bank of England recently estimated that the UK homes have £3billion of cash stashed away.

The research also reveals that whilst saving is a habit for the UK, many are simply not engaging with their hard-earned money: nearly a third (32%) of UK adults with savings admitted they do not know the current rate of interest on their main savings account, while a fifth (17%) admit to having never checked the rate on their primary savings account.

Paul Whitlock, Director of Savings at Charter Savings Bank, said: “High street banks are offering little more to the UK than a secure mattress for their savings, and with news that more than 400,000 NS&I savers will see interest rates on their Isas cut, it’s no surprise UK savers have themselves lost interest in their savings. People are simply not aware of how much harder their money could be working for them and so have become apathetic to taking their money from under their mattress, or from out of their High Street bank.”

“Whilst it is encouraging to see that saving has become a habit for so many of us, more needs to be done to ensure consumers know there are ways they can make their savings go further. The low interest rate environment over the last six years has opened up the opportunity for challenger banks – such as Charter Savings Bank, One Savings Bank, Aldermore and Shawbrook Bank – to offer the only viable alternative for savers’ money. Currently, challenger banks dominate the best buy tables and pay interest rates that top 2%. With this in mind, some savers could be earning more than four times as much interest as they currently do.

“Since Charter Savings Bank was launched in February, 32,000 savers have already deposited over £1.5 billion with us in just the first nine months of operation. Eligible deposits with these challenger banks are protected up to a total of £75,000 by the Financial Services Compensation Scheme, the UK's deposit protection scheme. More must be done to incentivise savers to seek the best possible return on their money, especially with the prospect of a base rate staying at a historic low well into 2017.”

Read more

Charter Savings Bank Newsletter - Issue 2 December 2015

01 December 2015

Issue two of our newsletter takes a look at the year ahead as well as arming you with some handy savings tips.

Click here to view.
Read more

2016: A year to saver?

01 December 2015

Looking back on 2015 we can conclude that it has been a mixed year of highs and lows for savers across the UK. The upsides came in the form of savers saving record amounts this year taking advantage of the variety of accounts on offer.

However, there have also been lows. The long-running debate about the Bank of England’s historically low interest rate continues to rumble on; the second half of 2015 saw experts up and down the country predicting a rates rise for first time in six years. However, an untimely downturn in the Chinese economy saw optimism dampened and now it is unlikely that we will see a rate rise anytime soon.

Despite this, we have seen a growing impetus for people wanting to save. In September, we reached a big milestone passing over £1.5bn in deposits and welcoming over 25,000 new customers since launching in March.

Also in September we commissioned our first research project to really get under the skin of UK savers and the findings highlighted some worrying trends. Nearly a third of UK adults with savings don’t know the current interest rate on their main savings account - in fact almost a fifth admit to never having checked the rate on their primary savings account.

Even when it comes to those that know their interest rate, many are receiving poor returns. More than an eighth of UK adults are earning 0.50% interest or less on their primary savings account, and with the average UK savings pot totalling £8,500, this equates to annual interest of just £43 a year before tax!

With interest rates so low, it’s no surprise UK savers are literally losing interest in their savings. People are simply not aware of how much harder their money could be working for them and so are keeping their savings in accounts that are only slightly better than a shoe box under their bed!

The key to making the most out of your money is to simply be savvier with your savings, not just aiming to save more every month or week but aiming to save smarter. 2016 should be a year to mix things up, and not let your money sit in a glorified shoe box, accruing little returns.

Read more

Charter Court mortgage lending passes £2.5billion

04 November 2015

• Over 14,500 loans completed in buy-to-let, residential and bridging to date

• Exceptional asset quality

• New mortgage lending forecast at £1.5 billion for 2015, up 114% on 2014

• Over 32,000 savings accounts opened at Charter Savings Bank in just 8 months since launch

• Savings customers have deposited £1.4 billion

Charter Court Financial Services Limited (Charter Court), the specialist challenger bank and owner of Precise Mortgages and Charter Savings Bank, today announces it passed through £2.5 billion of mortgage completions to the end of October 2015, helping over 14,500 buy to let landlords and home owners achieve their property ambitions.

New mortgage lending in 2015 is forecast to grow to c£1.5 billion, an increase of 114% vs. 2014. This has been driven by strong growth in core lending markets, competitive product rates and the current mix of stable economic conditions, rising real incomes, improving housing equity positions, and modest expectations of interest rate increases. Buy-to-let lending represents the largest sector, accounting for approximately 62% of Charter Court’s total lending. The remaining 38% of lending includes residential home owners, many of whom – such as the self-employed – are not well served by high street lenders.

Charter Court has just eight mortgage loans where there are three or more payments in arrears – this equates to an arrears rate of 0.07%*, and reflects strong lending controls and underwriting criteria. The CML mortgage industry average arrears rate is 1.19%**.

Charter Savings Bank, which has regularly been featured in the best buy tables since it opened for business in March 2015, has already opened over 32,000 savings accounts, in which customers have deposited £1.4 billion.

Ian Lonergan, CEO of Charter Court Financial Services Limited said: “Passing £2.5bn in cumulative lending and attracting £1.4bn of savings balances is a major milestone for the business. Along with other challenger banks of a similar scale, we are bringing a new level of choice and service to customers who are disillusioned with high street banks. Our loan performance and service levels remain very strong due to the investment the business has made in excellent people and a scalable infrastructure.”

*arrears rate based on mortgages as at month end September 2015.

** CML mortgages >3 months in arrears at end of Q2 2015.

Read more

Complete the Moneyfacts survey and you could win £1,000

29 October 2015

Charter Savings Bank has been nominated as a finalist in the 2016 Consumer Moneyfacts Awards in the 'Online Savings Provider of the Year' category, but in order to win, we really need your vote. To vote for Charter Savings Bank, all you need to do is click on the vote button and complete the Consumer Moneyfacts survey by 20 November 2015. Moneyfacts will enter you into their free prize draw to win one of three £1,000 prizes.

Click here to view Moneyfacts survey terms and conditions.

The Consumer Moneyfacts awards are considered among the most prestigious in the consumer finance industry. Last year over 70,000 consumers voted and had their say.

Read more
Financial Services Compensation Scheme

Financial Services Compensation Scheme

Your eligible deposits with Charter Savings Bank are protected up to a total of £85,000 by the Financial Services Compensation Scheme, the UK's deposit protection scheme. Any deposits you hold above the limit are unlikely to be covered. Please click here for further information or visit