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The Sun
a day ago
- Business
- The Sun
Millions of Brits could be nearly £10,000 better off by switching savings accounts
MILLIONS of Brits could be nearly £10,000 better off as banks directly tell them how to best invest their savings. Chancellor Rachel Reeves unveiled the move as part of the biggest shake-up in a decade of financial regulation in a summit with executives from the sector. Banks will send investment opportunities to savers for the first time from next April to help boost their savings pot. The changes will mean that anyone with money sat in a low-interest savings will be offered advice to switch to stocks and shares. Industry estimates say more than 29 million adults have their savings sat in an account offering less than 1 per cent. The average return for stocks and shares accounts is around the 9 per cent mark. The Treasury - who unveiled the plans as part of their Leeds Reforms - say that under current trends millions of people could be more than £9,000 better off in twenty years time. Those who invest £2,000 today could have their hands on £12,700 if they put their money in stocks and shares. This contrasts with just £2,700 in a cash account at 1.5 per cent. High Street banks and financial institutions will be getting behind an advertising campaign to help consumers. Ms Reeves set out a host of reforms for the financial sector which is seen as one of the top eight drivers of growth for the UK as identified by Industrial Strategy. She said: 'We fixed the public finances and stabilised the economy. 'Now we need to double down on our global strengths to put the UK ahead in the global race for financial businesses - creating good skilled jobs in every part of the country and helping savers' money go further through our Plan for Change.' Emma Reynolds, Economic Secretary to the Treasury, said: 'Helping people take advantage of better returns from investing is key to better financial health, giving them a stake in a growing economy and connecting promising businesses with capital. 'These reforms will make the UK the best location for financial services firms and tear down barriers to investment to growing our economy and making families better off.' The Leeds Reforms will cut red tape for the sector in a bid to drive investment from markets such as America and Asia. The Chancellor will make her Mansion House speech tonight where she will rip up financial red tape to make the UK a more attractive place to do business for financial firms. But City grandees will be listening out for reassurance that wealth taxes will not be imposed in the Budget - to avoid entrepreneurs and the wealthy from fleeing the country.
Yahoo
a day ago
- Business
- Yahoo
Rachel Reeves plans boost for savers with cash in low-interest accounts
Savers with cash languishing in low-interest bank accounts are set to be inundated with offers to invest their money in stocks and shares under new government plans to encourage greater financial growth. Banks will be required to send customers details of potential investment opportunities, and a large-scale advertising campaign will be launched to raise awareness of the benefits of investing over saving. According to the Treasury, based on current trends, if savers were to move just £2,000 from a low-interest account into stocks and shares, millions of people could see an increase of more than £9,000 over the next 20 years. Chancellor Rachel Reeves, speaking in Leeds ahead of her Mansion House speech to City leaders, said: "We need to double down on our global strengths to put the UK ahead in the global race for financial businesses, creating good skilled jobs in every part of the country and helping savers' money go further. Read more: Best cash-saving accounts as markets bet on interest rate cut The government's plan comes as an estimated 29 million UK adults hold cash in accounts that offer interest rates as low as 1%. Over the past decade, the average return for stocks and shares has been around 9%. The Treasury's figures suggest that a £2,000 investment today could grow to £12,000 over 20 years, compared to just £2,700 if it remained in a cash account offering 1.5% interest. This highlights a potential £9,000 difference for savers willing to switch. For savers who are cautious about tax, the government allows up to £20,000 a year in tax-free savings and investments within an individual savings account (ISA). The Treasury is pushing to incentivise further investing by making it more accessible and promoting higher returns for savers. However, with higher returns come higher risks. Historically, many savers have been reluctant to invest due to concerns over the fluctuating value of investments. In response, the Treasury has suggested that specific risk warnings on investment products might be revised. It said there would be a "review of risk warnings on investment products to make sure they help people to accurately judge risk levels". An industry-led advertising campaign will explain the benefits of investing. From April 2026, the Financial Conduct Authority (FCA) will introduce Targeted Support, enabling banks to alert customers about specific investment opportunities. This will help shift money from low-return current accounts to higher-performing stocks and shares investments. Read more: First-time buyers on £30k salary now able to apply for mortgage Economic secretary to the Treasury, Emma Reynolds said: "Helping people take advantage of better returns from investing is key to better financial health, giving them a stake in a growing economy and connecting promising businesses with capital. These reforms will make the UK the best location for financial services firms and tear down barriers to investment to growing our economy and making families better off.' As part of the government's broader reform package, the Treasury also announced plans to allow long term asset funds (LTAFs) to be held in stocks and shares ISAs starting next year. This would enable individuals to invest in assets like innovative businesses and infrastructure projects, further diversifying investment options for UK savers. The government has stated that it will 'continue to consider reforms to ISAs and savings' to find the right balance between cash savings and investment, ultimately boosting both individual financial growth and the UK economy. With these plans, the government hopes to encourage a shift from traditional savings towards investments that will benefit the wider economy, creating more opportunities for growth and financial security in the long term. However, critics warn that while the initiative aims to provide higher returns, it may expose more people to the risks associated with investing. Read more: FTSE 100 LIVE: London heads near all-time highs as EU readies for US tariffs Reeves is also pledging to cut red tape, in a push to attract investment and drive growth. Under the 'Leeds' reforms just announced, 'unnecessary financial red tape' will be 'drastically cut', the Treasury said. "A new concierge service within the Office for Investment will harness UK networks globally to actively court international financial services companies, creating a one-stop-shop to promote the UK and provide tailored support to help businesses plan where to invest based on their needs – better harnessing specialist clusters across the country from asset management in Edinburgh, to Fintech in Leeds and Cardiff, and insurance in Norwich and Norfolk."Fehler beim Abrufen der Daten Melden Sie sich an, um Ihr Portfolio aufzurufen. Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten Fehler beim Abrufen der Daten
Daily Mail
03-07-2025
- Business
- Daily Mail
Golden age of house price growth is over, economists claim
The golden age of property as an investment is over, according to economists at a major finance firm. The wealth manager Rathbones assessed the performance of stocks and shares versus house prices over the past century, and concluded that the boom years of bricks and mortar are now behind us. Since 2016 it found the price of residential property had barely kept up with inflation, rising at an average of 3.7 per cent per year. In London, where buyers previously enjoyed the biggest gains, housing did even worse, with house prices rising at just 1.3 per cent a year. This meant they under-performed inflation by 2.2 percentage points each year. Those who bought property between the 1980s and early 2010s have benefited from the biggest gains. Between 1980 and 2016, house prices rose at a rate of 6.7 per cent annually, and 8.5 per cent in London - well ahead of inflation. End of the boom? Average house prices outside London have only just kept pace with inflation since 2016, in contrast to the preceding three decades How do stocks and shares compare to property? Since 2016, stock markets have risen significantly faster than property prices, according to the research. The Rathbones economists found that £100 invested in UK property in 2016 would have been worth £134 in 2024. If the same amount had been invested in an indicative portfolio of 25 per cent UK and 75 per cent international equities, that would rise to £174. Meanwhile, £100 invested in London property in 2016 would have increased to just £111 in 2024 on average. 'The idea that you can't go wrong with bricks and mortar just isn't true,' said Oliver Jones, head of asset allocation at Rathbones. 'The data shows that diversified global investment has put to shame returns from housing over the last decade – and we believe this trend will continue.' This, he said, is largely down to rising interest rates in recent years. 'The earlier boom in house prices was fuelled by factors which no longer hold,' Jones continued. 'The huge decline in interest rates from their generational high in the early 1980s won't be repeated. 'Homebuilding is rising after decades of very low rates, and government policy has become progressively less favourable to investors in residential property since the mid-2010s. The idea that money is safest in houses simply is not true any more.' Looking back over more than a century, Rathbones found the average house price hovered around four times average annual earnings between 1910 and the late 1990s. However, after 2000 this more than doubled, with house prices rising to as much as eight times average earnings, leaving property much more expensive for the typical buyer. The old idea that property will always deliver is for the birds, and we strongly recommend taking advice Further, after decades of low interest rates, global instability has created volatility in financial markets and fuelled inflation, pushing up mortgage interest rates. This has further impacted affordability for most first-time buyers and reduced the appeal of buy-to-lets and second homes used for holiday lettings bought using mortgages, acting as a drag on house prices. Ade Babatunde, associate financial planning director at Rathbones. added: 'We're being asked by many people who own second properties and buy-to-lets whether the time has come to sell up and invest their money instead.' 'This research should be a wake up call to anyone relying on property to support their financial ambitions, especially when thinking about retirement or succession planning. 'The old idea that property will always deliver is for the birds and we strongly recommend taking advice.' How to find a new mortgage Borrowers who need a mortgage because their current fixed rate deal is ending, or they are buying a home, should explore their options as soon as possible. Buy-to-let landlords should also act as soon as they can. Quick mortgage finder links with This is Money's partner L&C > Mortgage rates calculator > Find the right mortgage for you What if I need to remortgage? Borrowers should compare rates, speak to a mortgage broker and be prepared to act. Homeowners can lock in to a new deal six to nine months in advance, often with no obligation to take it. Most mortgage deals allow fees to be added to the loan and only be charged when it is taken out. This means borrowers can secure a rate without paying expensive arrangement fees. Keep in mind that by doing this and not clearing the fee on completion, interest will be paid on the fee amount over the entire term of the loan, so this may not be the best option for everyone. What if I am buying a home? Those with home purchases agreed should also aim to secure rates as soon as possible, so they know exactly what their monthly payments will be. Buyers should avoid overstretching and be aware that house prices may fall, as higher mortgage rates limit people's borrowing ability and buying power. What about buy-to-let landlords Buy-to-let landlords with interest-only mortgages will see a greater jump in monthly costs than homeowners on residential mortgages. This makes remortgaging in plenty of time essential and our partner L&C can help with buy-to-let mortgages too. How to compare mortgage costs The best way to compare mortgage costs and find the right deal for you is to speak to a broker. This is Money has a long-standing partnership with fee-free broker L&C, to provide you with fee-free expert mortgage advice. Interested in seeing today's best mortgage rates? Use This is Money and L&Cs best mortgage rates calculator to show deals matching your home value, mortgage size, term and fixed rate needs. If you're ready to find your next mortgage, why not use L&C's online Mortgage Finder. It will search 1,000's of deals from more than 90 different lenders to discover the best deal for you. > Find your best mortgage deal with This is Money and L&C Be aware that rates can change quickly, however, and so if you need a mortgage or want to compare rates, speak to L&C as soon as possible, so they can help you find the right mortgage for you.
