Archive: MoneySavingExpert's Money Tips Email

Savers... check what your accounts pay now
The top easy-access savings now beat fixes, at over 5%. Yet too many firms have dropped rates to diddly squat

Martin: "What's happening to savings is a mirror of mortgages (above), except here higher rates are good, lower bad. The rate you can fix at has dropped, as they're based on longer-term interest-rate predictions, while the top paying variable (easy-access) rates haven't, as they're based on the UK base rate, which the Bank of England held last week. So while normally you tend to get better rewarded for locking money away in a fix, right now you don't.

"The market consensus is the UK base rate will be cut in November, so easy-access rates are likely to drop 0.25 percentage points then, but that'd still leave the best of them on par with current fixes, so it's looking good, especially if you want access to your cash. Though the benefit of fixing is long-term rate surety, so if you want to ensure a certain rate, and not risk big future drops, fixing and fixing longer does that (and as fixed rates may creep down a touch over the coming months, sooner is likely safer).

"For everyone though, the key rule is there are HUGE variances between the best and the bog-standard rates in each category, so check what you earn, and ditch and switch if you can. Over to the team now to run through the best deals of each type (& do check out the special savings with big rate boosts checklist at the end too)."

All accounts listed have full UK £85,000 per person savings safety protection. If you've more, consider spreading it over multiple institutions to keep it all protected.

• Top notice accounts: 5.25% variable. Not easy-access, not a fix, but somewhere in between. Investec's 5.25% 90-day account* (min £5k, max £250k) pays monthly interest. It's less flexible than easy access, but a higher rate, and more flexible than a fix, as you can ask to withdraw whenever you want, but it takes 90 days - an option for those who may need money but won't be in a rush. Or for a shorter notice period, there's Vanquis Bank's 5.05% 60 days (min £1k, max £250k). These accounts are variable though, so they can change rates, but they must tell you long enough in advance of rate reductions so that you can get the money out before it drops. See top notice accounts.
  
  
• Top easy-access rates: 5.1% variable in a tax-free cash ISA, 5% variable in normal savings. Easy access simply means you can put money in and take it out whenever you want - it's the bog-standard type of savings. Rates are variable, which mean they can and do move, often with Bank of England base rates, but also as banks may drop them for their own competitive reasons.
  
  Currently, the top cash ISA actually beats normal savings. A cash ISA is just a savings account you never pay tax on. Trading 212's 5.1%* lets you put in up to £20,000, allows unlimited withdrawals, and allows you to transfer (without limit) existing cash ISAs in too. So if you've yet to use this year's ISA allowance, even if you won't earn enough to pay tax on savings, you may as well do this in order to bag the higher rate. Full info in top cash ISAs.
  
  As for normal easy-access savings... Top but limited withdrawals: Chip's 5% (min £1, max £1m), but you can only withdraw free 3x a year. Top unlimited withdrawals: Oxbury's 4.87% (min £25k, max £500k), followed by Santander-owned Cahoot's 4.85% Simple Saver (min £1, max £500k). There are far more options in top savings, including top big-name savings, plus higher rates if you have (or open) the right current account.
  
  
• Top fixed savings: up to 4.85% guaranteed if you can lock money away. With fixed savings, you can't usually withdraw your money until the end of the term, but in return the interest rate is guaranteed. So only lock away what you definitely won't need access to. Full info and more options in top fixes, but today's top rates are:
  
  - 6mth fixes: Zenith 4.85% 6mth fix (min £1k), or 5.3% (min £20k) via a savings platform - see top short fixes.
  - 1yr fixes: Monument 4.81% (min £25k), Zenith 4.8% (min £1k).
  - 2yr fixes: RCI Bank 4.7% (min £1k), Birmingham Bank 4.68% (min £5k).
  - 3yr fixes: Birmingham Bank 4.53% (min £5k), Hodge Bank 4.52% (min £1k).
  - 5yr fixes: Hodge Bank 4.37% (min £1k), Birmingham Bank 4.36% (min £5k).
  
  Want to fix but with a get-out-of-jail-free clause? If you are worried you may need access to your cash, fixed-rate cash ISAs can't permanently lock your money away (instead, withdraw early and you pay an interest penalty). The trade-off is the rates are lower... 4.61% for 1yr, 4.42% for 2yrs, and 4.35% for 3yrs.
  
  
• SPECIAL ROUTES TO BOOST INTEREST FURTHER?
  
  - 50% bonus for many on Universal Credit or Tax Credits. See Help to Save.
  - 25% bonus for first-time buyers aged 18 to 39. See Top Lifetime ISAs.
  - Got expensive debt? Paying it off is often more lucrative than saving. See Should I pay debt with savings?
  - Earn up to 8% on smaller amounts, if you can save monthly. See Top regular savings.
  - Prefer to invest? Higher returns, but more risk. See Stocks & shares ISAs.

Martin's Pension Credit clarion call update
Don't assume it's not you! I'm delighted to say we're swamped with: 'I can't believe it, I was sure we weren't due, but we checked, we are! Thank you' messages
The Govt's cut Winter Fuel Payment for millions of pensioners, yet find out why more people are eligible than they think they are...

Pension Credit is a critically underclaimed top-up of the state pension for those on lower incomes that I've been urging people to check out for over a decade. On average it's worth £3,900/yr. Yet over 800,000 eligible pensioners likely still miss out. That's why it's frustrating that it's the new main gateway for the £200 (£300 for over-80s) Winter Fuel Payment - which until now was paid to all pensioners. I've been loudly making noises on that, but for now the key is to get as many people as possible who are due Pension Credit to get it...

Last week, we ran Lucinda's message: "My mum was just over the threshold, so we didn't apply, but worried about the Winter Fuel Payment, no free TV licence, cheaper broadband etc. Then I saw Martin's email saying: 'If you're only just over, try anyway.' A (long) call to the Department for Work and Pensions later and mum told me she'll get Pension Credit. My dad died earlier this year, so not only has mum been going through it, but money is tighter. I can't thank you enough. She's relieved & thrilled." And that's led to many more people telling us similar, for many reasons. First, though, my rule of thumb...

Now for why some may qualify with higher incomes...

• You can qualify with HIGHER income if you have a disability or illness. An example is those who get Attendance Allowance (AA) - a crucial payment for older people who need help and support with day-to-day activities (do click the link and read more, it's massively underclaimed too). If you get it, the income threshold for qualifying for Pension Credit rises by £82/wk (on top of your AA payment, which isn't counted as income). Adele emailed us:
  
  "Thank you for bringing AA to my attention. I've successfully claimed for my dad who has chronic arthritis - so he now gets an extra £72/wk. He has struggled for years, he'd not been able to claim Pension Credit previously as he has a small private pension. Now he has AA, he's also eligible for a further £35/wk Pension Credit, and his Housing Benefit has been increased by £40/wk. So a total extra £150/wk - a huge help, and he will still be eligible for Winter Fuel Allowance, so will receive annually almost £8,000 extra. It will change his life and I'm really grateful to you."
  
  
• You could still be due Pension Credit if you've savings. Savings or investments under £10,000 are ignored for Pension Credit assessments. If you've more, for every £500 over £10,000, it counts as £1/wk income (if only it really generated that much!). As Anne just emailed:
  
  "Hi, my mum is widowed and in her 80s. Her state pension is just below the single person level, but as she had some savings we didn't think she'd get Pension Credit. After reading your recommendation, she made an application but didn't hold out much hope. Surprisingly, she was successful and will get Savings Credit, and a 3mth back payment. Now she will be eligible for Winter Fuel Allowance and an over-75s' free TV licence too. All thanks to you Martin, and all the advertising to apply even though you may think you're not eligible. I would recommend everybody try." Me too - though I'd nuance it to... everyone on a lower income.
  
  What is the Savings Credit element of Pension Credit? This applies to the three in four state pensioners who are on the OLD state pension (roughly those aged 72+). It is designed to reward those who saved towards retirement. For each £1 of income (including savings) you have above £190/wk, you get 60p of Savings Credit, though once you hit £218/wk, your Pension Credit is reduced by 40p for every £1 above (numbers differ for pensioner couples). It's all a bit complex, so just check if you're due.
  
  
• High housing costs (even in assisted living) will be taken into account when you apply. Again, this means you can qualify if you earn above the standard Pension Credit threshold (and may mean a council tax reduction), and you may be due Housing Benefit or Support for Mortgage Interest. Wendy emailed about this:
  
  "Like Lucinda, I didn't think my mum would be entitled to Pension Credit because of her savings. However, when I checked I found out that her housing costs, including high ground rent and the service charge in her assisted living apartment, would be taken into consideration. She could be entitled to Pension Credit according to the calculator. This would make her future so much more secure. Thanks for the encouragement, keeping my fingers crossed!"