SAVINGS institutions have rushed to cut the return on deposits after the Bank of England lowered
interest rates, with National Savings & Investments leading the way.
It has trimmed returns on its Direct Isa from 6.3% to 6.05%.
Meanwhile, mortgage lenders announced rate cuts for existing borrowers from January 1. Halifax sliced off 0.25%, reducing its standard loan to 7.5%, and cutting the monthly cost of a £50,000 loan by £7.50. First Direct also cut by a quarter point.
Nationwide trimmed by 0.25%, giving a new standard interest rate of 6.99%. Egg shaved a miserly 0.15% off its mortgages. Others to have announced 0.25% reductions include the Co-op Bank and First Active.
Benefits by phone
THE Pension Service is being restructured to make the system simpler and less intrusive for older people. The Department for Work and Pensions has announced plans to give pensioners guidance with council tax bills and rent payments over the phone.
From October 2008 it will deal with pension credit, housing and council tax benefit applications over the phone then automatically send the claims on to the customer's local authority.
By 2010, around 50,000 over-60s will be able to complete the whole application process without having to send off any forms.
However, pensions credit, housing benefit and council tax benefit will now only be backdated for a maximum of three months, as is the case with working age benefits. The length of time older people can spend abroad before their pension credit is suspended will be increased from four to 13 weeks, in line with housing and council tax benefit.
£186,000 a child
RAISING a child costs parents as much as £186,000 and could rise to over £265,500 by 2012, according to new research.
Parents are paying almost £8,859 a year, equivalent to £24.30 a day, for their kids from birth until they reach 21.
No more novelties
NINE out of 10 Britons claim to have received Christmas presents they did not want or like, according to Barclays. The worst presents included ornaments, jumpers, toiletries and novelty gifts.
Nearly half the people polled admitted hiding unwanted presents, while two in five preferred to donate to a charity shop. A third try to get refunds and one in five sells old gifts on eBay. Almost two in five people re-use their unwanted presents to give to other people.
Skipton present
SKIPTON Building Society has launched a limited-edition Christmas bond which pays an interest rate of 6.75%.
The minimum investment is £500 and the maximum £50,000 by cheque or transfer.
Meanwhile, M&S Money has launched new fixed-rate Isa savings products paying 5.7% over one year, 5.5% over two years and 5.4% over three years.
Guarantee row
THE Association of British Insurers is joining forces with the British Bankers Association to resist plans to significantly increase the level of deposit protection in the light of the Northern Rock fiasco.
Under existing rules, the first £2,000 is guaranteed, but after that only 90% of the next £33,000.
The Chancellor is currently providing unlimited guarantees to Northern Rock depositors, and has promised the same to savers with any other institutions hit by the credit crunch.
However, insurers are concerned that motorists and households will end up footing the bill, through higher premiums, for risky activities undertaken by some deposit takers.
