JEFF PRESTRIDGE: Despite rates staying put, for those two million homeowners who have variable rate mortgages, now is the time to fix
So, after all the speculation and all the straw polls suggesting a hike was on the cards, interest rates remain at 0.1 per cent for the time being.
Good news for those homeowners who have a variable – rather than fixed – rate mortgage. Bad news for savers who will continue to earn the equivalent of peanuts from the money they have squirrelled away in their local building society. Peanuts quietly being ravaged by inflation.
Although savers may receive a little pre-Christmas cheer next month when the Bank of England’s Monetary Policy Committee once again opines on interest rates, I wouldn’t bank on it.
Highs and lows: The case for fixing your home loan rate remains compelling
While Base Rate may well rise in four weeks’ time, it doesn’t automatically mean savers will benefit. Banks – and to a lesser extent building societies – are notoriously parsimonious when it comes to passing on the benefit of any rate rise to savers.
Some won’t, while others will delay until the New Year – and then only pass on a fraction of any increase. As for homeowners, the cost of new loans (fixed-rate deals in particular) rose in anticipation of a rate hike. I doubt lenders will now reverse these increases in light of the Monetary Policy Committee’s decision to keep things as they are.
Yet the case for fixing your home loan rate remains compelling. To those two million homeowners who have variable rate mortgages, now is the time to fix.
Decent society must look after its elderly
The House of Commons has hardly covered itself in glory in recent days. But it has a chance to redeem itself in just over a week’s time when MPs consider a Lords amendment on the Government’s controversial decision to suspend the ‘triple lock’ guarantee on state pension increases.
A suspension that means the state pension will increase by 3.1 per cent from next April – and not by the 8.3 per cent it could have risen by if the earnings link had been maintained.
The swashbuckling Baroness Ros Altmann has led the Lords campaign against the breaking of the triple lock. Shrewdly, she’s not arguing for the full 8.3 per cent increase to be applied. Instead, she wants an increase that takes into account the threat of rising inflation (five per cent, even more) that will take its toll on many pensioners’ household finances next year.
Altmann says a decent society must look after its elderly. She also believes it is invidious that pensioners are being shortchanged to fund cuts in both alcohol duty and the taxes paid by the country’s banks. Many readers will agree with her. It’s hard not to.
Redmayne Bentley making it MORE difficult for clients to vote at AGMs
How disappointing it was to learn from a reader that stockbroker Redmayne Bentley is going against the crowd by making it MORE difficult for its clients to vote at AGMs. Disenfranchising them from engaging with the companies they hold shares in – rather than empowering them.
In an email to clients, Redmayne says it will no longer alert clients to upcoming AGMs and shareholder votes (for example, on key issues such as a takeover or a rights issue) so that they can participate in them.
Instead, those keen to get more involved with the companies they invest in will now have to do most of the donkey work themselves, finding out when AGMs are being held or key shareholder votes are taking place. They will then have to email Redmayne details of their voting instructions which will then be relayed to the ‘relevant parties to arrange’.
How backward looking, especially given Interactive Investor’s imaginative decision last week (revealed exclusively in Wealth) to automatically enrol all investors into its voting service. It now means Interactive’s customers will receive details of upcoming votes and then be able to cast their vote at the press of a button.
Redmayne is proud of the fact it has provided personal investment expertise since 1875. But in this instance, it’s horribly out of touch and should reconsider – as a matter of urgency – its decision to make life more difficult for those investors who want to take an interest in the companies they have a stake in.