Money warning: Savers urged to ‘spend mindfully’ as high-street starts to open

Savings have been pushed to their absolute limits over the last few months and consumers across the UK have been hit hard by coronavirus. The disease has completely upended most people’s lives as income and employment dries up.

 

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This would be hard enough to handle on its own but aggressive lockdown rules meant that people have very limited options for where they can go and what they can spend their money on.

The population at large is likely very eager to get back to some normality.

Activities such as visiting a restaurant or going to the cinema – once they reopen – will feel like a blessing to many who have been stuck at home for months.

Thankfully, the country may slowly be starting to open up again in the coming weeks and months.

On May 25, Boris Johnson in a daily press conference revealed that some parts of the country will soon see life again if the current trends persist.

The Prime Minister said: “Today, I want to give the retail sector notice of our intentions to reopen shops, so they too can get ready.

“So I can announce that it is our intention to allow outdoor markets to reopen from June 1, subject to all premises being made COVID-secure, as well as car showrooms, which often have significant outdoor space and where it is generally easier to apply social distancing.”

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He went on to highlight when other retail shops may open: “Then, from 15 June, we intend to allow all other non-essential retail, ranging from department stores to small, independent shops, to reopen.

“Again, this change will be contingent upon progress against the five tests and will only be permitted for those retail premises which are COVID-secure.”

This is undoubtedly good news and consumers across the UK have earned their right to enjoy some retail therapy after so much stress.

However, it’s now been suggested it would also be a shame to see some of the money the population has collectively saved during this period spent without consideration.

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Adam Bullock, the UK Director of TopCashback UK, has called for people who show a little bit of restraint as the high-street reopens.

He exclusively told Express.co.uk: “As lockdown eases and shops start to re-open, it’s natural to want to return to our way of life as we knew it.

“For many, splurging in person (especially with the rumours of huge sales) could be too tempting to miss.

“Whilst going to the shops may feel novel and possibly therapeutic, it’s important to try to spend mindfully.

“If you’re lucky enough to have saved anything during lockdown, this needn’t get blown in one go.

“Of course it’s vital to help the economy recover, but remember we do not know how long the situation will last for.”

There are digital tools available which can help people make sure they keep track of their income and outgoings, as Adam explained: “If you set clear spending budgets by using apps (such as Money Dashboard) you’ll be able to track your finances and manage your monthly outgoings carefully.

“Other personal finance apps like Chip and Emma can also be brilliant for helping you save money subconsciously.”

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How to check on your state pension age ahead of July’s increase – you may be affected

State pension age is constantly under review by the government and it will be 66 for everyone by October 2020, ahead of further rises. There are multiple changes planned for it in the pipeline and as such, it can be difficult for people to keep up with how the changes will affect them.

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The government provides a free-to-use tool which will provide users with the exact date they’ll reach state pension age.

This tool can be found on the government’s website and only requires two pieces of information.

To start with, the tool will ask the user for their date of birth.

Once this is entered, it will then ask whether the user is classed as a man or a woman.

The final screen will display the exact date that the user will reach state pension age.

Below this, it will tell the user the age they’ll be at this point.

Younger users of this tool will likely see that their state pension age is 68.

People approaching their retirement years in the very near future will likely have a state pension age of 66.

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This final page of the tool will also provide the user with further information on the new state pension rules as well as where they can get a forecast.

The date that the user will be able to qualify for Pension Credit will also be displayed, although this will most likely be the same date as state pension age.

If the user wants more information on their state pension payments, a forecast can be requested which details how much the user will receive, when they can get it and how they can increase it.

To use the forecasting tool, the user will need a government sign in account which can be created then and there if need be.

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The government’s website also provides a tool that can help people track down their private pensions if they’ve lost them.

This tool will allow users to find contact details for a pension they may have had in their working lives.

To start with, the tool will ask the user if they’re looking for a workplace or personal pension.

Once the selection is made, a previous employer’s name will be searched for.

Based on what the user enters, a list of all the employers associated with the searched word will be displayed.

The address and telephone numbers of these companies will be detailed.

It will then be up to the user to contact the companies themselves to find out if they hold a pension with them.

People approaching retirement age may have a number of options available to them for managing or increasing their state pension.

If the person doesn’t wish to retire straight away, they can defer their state pension payments which may increase them in the long run.

They may also be able to make voluntary National Insurance contributions which could also boost payments.

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National Insurance threshold rise: Tax cut for millions but does it affect state pension?

The National Insurance contributions threshold increased to £9,500 per year back in April. According to HM Treasury, the move is expected to see 31 million people benefit from a tax cut.

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It’s expected to see a typical employee save around £104 in 2020 to 2021.

Meanwhile, the self-employed, who pay a lower rate of National Insurance, would have £78 cut from their bill.

While the ability to potentially save money via a tax cut may have been welcome to taxpayers across the UK, many will have no doubt wondered whether this could affect their state pension.

This is because the amount a person can get via the state pension is linked to a person’s National Insurance record.

And, with the threshold rising, lower earners could potentially worry that they won’t make enough contributions in the future for their state pension.

However, HM Treasury confirmed back in January that the threshold changes would not affect low earners’ entitlement to the state pension, with the Lower Earnings Limit and Small Profits Threshold, above which individuals start building entitlement to contributory benefits, rising with the CPI measure of inflation.

In March this year, Chancellor of the Exchequer Rishi Sunak confirmed that the increase to the threshold would go ahead, with the plans having been announced when Savid Javid was Chancellor.

At the time, Steven Cameron, Pensions Director at Aegon, commented on Mr Sunak’s confirmation that the increase in the NI threshold wouldn’t impact state pension entitlements.

He said: “Confirmation that the Government is increasing the threshold for when National Insurance (NI) becomes payable to £9,500 is good news, saving 31 million people across the UK up to £104 a year.

“This means those earning under £9,500 will pay no National Insurance whatsoever.

“What’s doubly welcome is the confirmation that those taken out of paying NI won’t lose out on credits towards their state pension.

“Anyone earning above the Lower Earnings Limit, which will increase with inflation from its current level of £6,136 will still be entitled to a year’s credit.

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“This is important because people need at least 10 years’ credits to receive any state pension and 35 years to receive the full state pension which is expected to rise to £175.20 a week from April.

“Without this provision, people might have gained from paying less NI today only to suffer from a reduced state pension in future.”

In April, the Government ended the working-age benefits freeze as planned.

It meant that working-age benefits increased by 1.7 percent in line with inflation, having not risen since April 2015.

The benefits affected by the rise were: Jobseeker’s Allowance, Employment and Support Allowance, Income Support, Housing Benefit, Universal Credit, Child Tax Credits, Working Tax Credits and Child Benefit.

Meanwhile, the state pension increased by 3.9 percent, under the triple lock mechanism.

This sees the state pension rise by the highest out of 2.5 percent, the average rise in earnings, or inflation.

This year, the increase was tied to wage growth.

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Furlough ‘flaw’: Mum in ‘catch-22’ between shielding daughter’s health or providing food

The Government announced the Coronavirus Job Retention Scheme – also known as the furlough scheme – back in March. It has since been extended to October, however changes will take place from August.

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While some countries in the UK remain in the full lockdown announced on March 23, Boris Johnson has revealed some changes to the restrictions in England.

But, with more workplaces opening up, Citizens Advice has raised concerns for families needing to shield due to health reasons.

New research from the charity shows that four in ten (41 percent) of those in the shielded group have lost at least 20 percent of their income since the coronavirus outbreak began.

More than a quarter (27 percent) have lost 60 percent of their income or more.

Citizens Advice says it has supported thousands of workers with underlying health conditions and their family members, who have been denied access to the furlough scheme.

Meanwhile, others were initially reported but have since been asked to return to frontline roles such as shop workers and delivery drivers.

Research suggests as many as one in ten (12 percent) in the shielded group are working outside of the home, despite this potentially putting their health at risk.

Citizens Advice is warning that people face a “catch-22” due to a flaw in government guidance, which advises 2.5 million people who are “extremely clinically vulnerable” to shield at home until at least the end of June, but it does not oblige employers to furlough them.

It’s something which mum-of-two Sarah, whose name has been changed, is of great concern.

She has been told her three-year-old daughter must shield due to asthma and allergies.

Sarah is currently furloughed from work at a preschool, which is due to reopen on June 1.

She’s been told she will have to take unpaid leave if she doesn’t return on this date.

“I’ve basically been told to choose between my daughter’s health or keeping food on the table,” Sarah said.

“It’s stressful, I suffer with anxiety and depression and I used to have panic attacks quite frequently. I can’t even concentrate, I can’t sleep, I can hardly eat.”

It’s a worry for care home worker Faye, whose name has been changed too.

Faye has been told to shield as she has blood cancer.

Currently, she’s furloughed on health grounds and is expected back at work on June 19, but her employer says the situation is constantly changing.

She said: “I watch the daily broadcast every single night waiting for something, but I’ve heard nothing about people with illnesses that work.

“I don’t want to go back after being home for 12 weeks to then catch the virus.

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“It’s so frustrating. I really don’t know which way to turn, do I go back to work and take the chance? Or is someone going to say that if you work in a care home you need to stay home a bit longer?”

The Chancellor of the Exchequer Rishi Sunak is due to set out further details of the scheme this week.

Today, the charity is calling for the most vulnerable workers, including those in the shielded group, or who share a household with someone in the shielded group, to have a right to be furloughed for as long as their work would require them to breach public health advice.

Dame Gillian Guy, Chief Executive of Citizens Advice, said: “The government’s extraordinary interventions have protected millions of jobs and incomes, but some of the most vulnerable have still fallen through the safety net.

“We’re already seeing worrying cases of people being caught in a catch-22 where they have been denied furlough and asked to work in direct contradiction of public health advice. We fear the situation could worsen as more workplaces reopen.

“Unless people who are shielding have a right to be furloughed while their health is at risk, some will continue to face an impossible choice: paying the bills or protecting their health.”

Debbie Nolan, Health Programme Lead at Citizens Advice Liverpool, coordinates calls with people in the shielded group to check on their wellbeing. She said: “We’ve seen a surge in concerns about health and safety over the past two weeks as people with serious medical conditions, and those they live with, are asked to return to work.

“What’s most worrying is that some people go quiet when you ask them how shielding is going.

“At that point you start to realise they’re not shielding at all. The shielded are still going to work because they’re worried their boss will let them go if they speak up.

“These stories are absolutely heartbreaking. Many of us take for granted that we can talk to our employer when we have concerns, but not everyone is so lucky. That’s where our staff and volunteers step in.”

Express.co.uk has contacted HM Treasury asking for comment.

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Cleaning sensation Mrs Hinch reveals the best way to clean your kitchen hob

Mrs Hinch, also known as Sophie Hinchcliffe shares her cleaning hacks on Instagram with her three million followers. She posts regularly revealing how she cleans her home and what products she uses. The cleaning sensation has previously shared how she cleans her bedroom, kitchen and living room but she has recently revealed the most efficient way to clean your kitchen hob.

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Posting on her Instagram story, Mrs Hinch showed her fans how she cleaned her electric hob.

She started firstly by using one of her favourite products, Cif Cream with Micro Crystals, in the original scent.

Sophie then pours an ample amount onto her hob before leaving it to sit for a few minutes to work in.

She also wore rubber gloves as cleaning products can cause a nasty burn if it came into contact with any skin.

Leaving it to sit on the hob allows the product to really work and pick up any stubborn stains or marks left on the hob.

The Cif Cream with Micro Crystals claims to remove 100 percent of dirt to reveal beautifully clean surfaces.

The cleanser is also less harmful to the environment as the Microparticles that the cleaning product contains, are sourced from naturally occurring minerals that are not linked to the plastic microbes that hair the potential to contribute to micro plastic marine litter.

This cream cleaner is used for a deeper clean of the hob, other versions are available for a lighter clean.

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However it is advised to deep clean the hob often as a dirty stove can prevent pans sitting directly on the surface, making it much less effective when heating the pan.

Ovenclean.com recommends to clean your hob after every use, as this will prevent build up which will take much longer to clean.

Mrs Hinch then works the cream cleanser into her hob, removing any food or dirt that has become stuck onto the hob.

She then wipes the product away with a cloth, a microfibre one might be the best option for removing the cleaner.

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The product can be picked up for as little as £1 from shops like B&M, Home Bargains and Tesco.

To remove stubborn stains, Mrs Hinch uses another favourite called The Pink Stuff paste.

Fans of the cleaning guru rave about the cheap cleaning product on Facebook pages because of how versatile it can be.

Sophie applies a generous amount of The Pink Stuff onto her hob and then leaves it to sit for a few minutes.

She will then rinse it with a wet cloth to reveal a stain-free, shiny hob.

The Pink Stuff can also be used to clean sinks and work surfaces, again leaving the product to work for a few minutes before wiping it away with a wet cloth.

To clean her sink, Sophie adds a cup of soda crystals to the plughole, followed by white vinegar.

She then leaves it to soak for around 15 minutes before pouring a boiling kettle over the plug to disperse any remaining soda crystals.

Sophie will then scrub her sink with the same Cif Cream cleaner to reveal a sparkling stainless steel sink.

The product can also be used to clean kitchen tiles, as well as cleaning bathtubs, sinks and bathroom tiles.

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Premium bond winning numbers will be announced next week – how to check if you’ve won

Premium bonds can be held by anyone who is over 16-years-old and the prizes they award are completely tax-free. There is a minimum holding of £25 for each investment and a maximum of £50,000.

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The money invested in premium bonds buys unique bond numbers and it’s these numbers which are entered into a monthly prize draw.

The monthly prize draws will pay out a multitude of cash sums which vary from £25 to £1million.

New investors will need to hold their bonds for at least a month before they are eligible for the prize draws.

NS&I have a prize checker tool which allows people to check on their specific holdings and it is updated by the second working day of every month.

This means that June’s winning numbers will likely be announced early next week (June 2).

NS&I highlight that the quickest way to check on winning numbers is by using the prize checker.

This tool simply needs the user’s holder number.

The prize checker is available on NS&I’s website but it can also be downloaded from the app store or Google Play.

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If a holder wins, they will be contacted by NS&I by email, text message or post.

Winners of a prize of £5,000 or more will not have the money paid to them automatically.

NS&I will check in with these winners first by sending them a claim form in the post.

This form will ask the holder how they’d like to be paid and the form will need to be posted back.

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The prizes themselves can be handled in a number of ways and the holders of said winnings can choose how the money is paid to them.

Holders can ask NS&I to automatically reinvest any prizes into more bonds, which will give them a higher chance of winning prizes in future draws.

Premium bonds are not just used for the monthly prize draws, they can also be used as a general savings product.

They can be cashed in at any time and this request can be made online or over the phone.

If this is done, NS&I will normally cash in their oldest premium bonds first.

It is not possible to request that specific numbers are cashed in.

Some people may take the decision to cash in their bonds at the moment as coronavirus impacts family finances, meaning many will need to get hold of as much cash as possible.

On top of this, the unlikeliness of winning may also make premium bonds relatively unpopular at the moment.

The odds of winning are 24,500/1 and the annual prize fund interest rate is 1.4 percent.

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Cleaning tips: Mrs Hinch fan transforms her radiator using quick and easy steps

Mrs Hinch, also known as Sophie Hinchcliffe rose to fame after she started posting cheap and easy cleaning hacks onto her Instagram. She shares home cleaning hacks with cheap products as well as step by step guides onto her social media. Fans of the cleaning guru have since set up their own Facebook pages so that they can share their own cleaning discoveries with one another.

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One cleaning fan posted her cleaning hack on social media video site TikTok.

She revealed how using Mrs Hinch’s favourite cleaning products transformed her dirty radiator into looking good as new.

Posting on her TikTok channel called ‘Cleaning Obsessed’ cleaning fan Katie Grace started by applying The Pink Stuff paste onto an electric Sonic Scrubber made famous by Mrs Hinch.

The Pink Stuff paste is one of Mrs Hinch’s favourite cleaning products because the product is so versatile and can be used on many different appliances.

It has a thick, paste consistency that claims to be gentle on surfaces but tough on stains.

The electric Sonic Scrubber is a powerful hand held tool that scrubs away unwanted dirt that builds up in your home.

It claims to scrub away at 10,000 times per minute which can mean cleaning tasks become quicker.

The cleaning tan then worked the product into her radiator with the Sonic Scrubber which showed the cleaning product getting into all the places that are hard to clean.

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The radiator was marked with stains and dirt and had become discoloured over the years of not cleaning it.

The Pink Stuff paste can be picked up for as little as 89p and Mrs Hinch fans have revealed on their Facebook pages that it has become a household cleaning staple.

Katie then used an Elbow Grease pad and sprayed it with another Mrs Hinch favourite, Zoflora which is a scented disinfectant.

After spraying it with her favourite ‘Pine’ scent, she used the pad to wipe away The Pink Stuff paste.

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She also revealed that she diluted the Zoflora before spraying and Zoflora recommend diluting it 1:40.

Cleaning guru Mrs Hinch also loves Zoflora and she helps disinfect her sink every evening by pouring a capful of her favourite scent down the plug hole to keep it smelling fresh.

Mrs Hinch has also been known to love the Elbow Grease cleaning pads which retail at just 99p and can be purchased from stores like B&M.

Katie then revealed her sparkling clean radiator and wrote: “Spray with Zoflora after cleaning and when your heating is on the room will smell amazing!”

After showing off her clean radiator, her video received over 13,000 and over 100 comments.

One cleaning fan commented: “Ooh something else I can use my pink stuff on.”

“Amazing idea, I’ll have to try that,” another one said.

The Pink Stuff can also be used on household items like stainless steel taps, stainless steel sinks and fans have also shown how it can remove grime and dirt from the bottom of saucepans.

Mrs Hinch herself has been seen using the product on nearly every surface possible. In particular, she uses it to clean her oven and electric hobs. She says that she will leave the paste to sit for a few minutes before wiping it away with a cleaning cloth.

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Mortgage payment holiday extended to October – lenders offer lower deposit mortgages again

In a statement confirming the extension of the scheme, John Glen, the Economic Secretary to the Treasury said: “We’re doing everything we can to help people with their finances at this difficult time, and that includes making sure people get the support they need with their mortgages. “That’s why we’re working with the banks and lenders to extend payment holidays if people need them.

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“Everyone’s circumstances will be different, so when homeowners can pay some or all of their mortgage, they should work with their lender on a plan; but if they are still struggling, I want them to know that help is there.”

Christopher Woolard, Interim Chief Executive of industry watchdog the Financial Conduct Authority added, “Our expectations are clear; anyone who continues to need help should get help from their lender.

“We expect firms to work with customers on the best options available for them, paying particular attention to the needs of their vulnerable customers, and to provide information on where to access help and advice.”

Christopher continued: “Where consumers can afford to re-start mortgage payments, it is in their best interests to do so. But where they can’t, a range of further support will be available. People who are struggling and have not had a payment holiday, will continue to be able to apply until 31 October.”

These changes mean that people who have already applied for and started their three-month mortgage payment holiday may be able to extend this by another three months, subject to review and agreement with their lender.

For those people who haven’t yet applied for a mortgage payment holiday, they now have until October 31 to do so. The current ban on repossessions is also extended until the same date.

Mortgage lenders have been deluged with requests for mortgage payment holidays since the beginning of the crisis, with over 1.8million homeowners currently applying for help.

As a result, in order to cope with the underwriting and processing of mortgage payment holidays for existing clients, as well as the movements in the Bank of England base rate, many lenders temporarily withdrew the lower deposit mortgage products in March and April.

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This has proved frustrating for first time buyers and home movers with lower deposits, who have been unable to find a mortgage deal suitable over the past few weeks, and despite the current economic uncertainty, are still keen to purchase a property this year.

Gradually though, lower deposit mortgages are being reintroduced, with more lenders returning to this area of the market.

As of this week, lenders including HSBC, the Melton Building Society, the Chorley Building Society and the Earl Shilton Building society are offering 90 per cent loan to value (LTV) products, with Yorkshire Building Society also extending their purchase and remortgage deals to up to 90 per cent LTV this week. A very small number of lenders, including Nationwide, are even offering 95 per cent LTV products.

Charles Mungroo of Yorkshire Building says, “Following the government’s announcement last week which lifted a number of restrictions on the housing market, we’re delighted to re-launch our 90 per cent LTV range as well as products for New Build purchases up to 85 per cent LTV.”

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Charles continued: “We hope that by being able to offer higher LTV products within a week of physical valuations restarting, we can demonstrate our commitment to homeowners and those looking to get started on the property ladder to ensure they have a range of options to suit their needs.”

Lea Karasavvas, Managing Director of Prolific Mortgage Finances observed: “The week has been full of positive signs from many of the big lenders bringing more and more confidence with each announcement.

“With lenders such as Clydesdale and Virgin announcing a return to 90 percent loan to values as of next week and Accord having already announced 90 percent mortgages available for those borrowing up to £500,000 these are positive steps that show their intent to lend.

“The return of the higher loan to value products also highlights their confidence in values. To return to this kind of leverage so soon indicates lenders have little concern that values will drop considerably.

“If there was a general feeling that property prices were going to fall in excess of 10 per cent, such products would not be returning so quickly through risk of lenders concerns over acquiring negative equity borrowing at this level.”  

Lea concluded: “At present, the return of the higher loan to value products and the huge interest shown from buyers are hugely signals that the property sector itself should recover quicker than expected.”

Follow Louisa on Twitter: @louisafletcher

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ISA alert: Window for high rates closing – savers ‘best not sit on the fence for too long’

ISA accounts provide many beneficial benefits for savers which include tax breaks and potential bonuses. However, just as with any savings account, ISAs also have attributable interest rates which are expected to boost the money held within the account.

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Low interest rates are a wide ranging problem for bank accounts but new data revealed this week may worry savers who are already struggling.

Data from the Moneyfacts “UK Savings Trends Treasury Report” showed that the average one-year fixed ISA rate has fallen to 0.91 percent, the lowest rates since June 2017.

Financial experts, such as Martin Lewis, usually advise savers to shop around for the best deal when their rates lower but this itself may prove difficult.

The same report highlighted that the total number of savings accounts (including ISAs) dropped to 1,548 from 1,768 in recent months.

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The current number of savings products in total is now at its lowest level since February 2017.

For ISAs specifically, there are only 336 products available in May.

For comparison, this figure was 340 for April and 417 for March.

Rachel Springall, a Finance Expert at Moneyfacts, commented on this worrying findings: “Savers searching for a short-term fixed bond or ISA to safeguard their cash for the next year may be disappointed to find that average returns have fallen below one percent for the first time in three years.

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“Indeed, the savings market is awash with rate cuts and withdrawals, so consumers will need to work fast to secure the best deal.”

“As we had seen last month, savings providers pulled the most deals on a month-on-month basis since our electronic records began in 2007 and while the number of products to disappear month-on-month between April and May is less, deals are still disappearing.

“The number of savings accounts overall has now fallen to its lowest point in three years.

“Choice is dwindling for savers, in fact 220 deals have now vanished since the start of March, which was before the lockdown and two base rate cuts.”

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Rachel went on to theorise on what the causes may be for the general lowering of options: “If savers are looking for some flexibility with their cash then they may turn to an easy access account, however as these pay a variable rate the return could drop at any point.

“In fact, the market is already seeing a domino effect of rate cuts, with some of the top deals worsening in recent weeks.

“Providers are perhaps cutting rates to deter deposits due to demand or find they are much higher up the rate tables than they can cope with.

“Indeed, according to the Bank of England £11 billion flowed into sight deposits (such as easy access accounts) during March.”

While this is undoubtedly bad news for savers, there may be a silver lining to look out for.

Despite all the negativity associated with coronavirus and the economy, Rachel highlights that it could create an ideal environment for savers moving forward.

She detailed that while larger banks may have limited options for their products in light of the base rate cuts, smaller “challenger” banks may have more freedom to offer better rates.

She warns though that consumers will need to act fast to take advantage of this narrow window: “They are not immune to making cuts, savers best not sit on the fence for too long to secure the best possible return.”

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Pension savers issued ‘concerning’ warning as expert reveals top easy access savings rates

Pension freedoms were introduced from April 2015, with the move meaning savers were given the option to take cash out once they reach the age of 55, with 25 percent of each lump sum withdrawn being tax-free.

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Fast forward five years, and HM Revenue and Customs (HMRC) has said that the number of individuals taking money out of their pensions has hit a new high.

According to the latest research by Moneyfacts.co.uk, savers withdrawing their cash from pensions may well be a contributor to the rise in deposits in accounts that are accessible without penalties, with Moneyfacts suggesting consumers may be opting for a standard savings account due to market volatility.

Between January and March this year, 348,000 individuals made a withdrawal from their pensions.

This is a 23 percent increase from 284,000 in the same quarter of the previous year.

At the same time, the value of flexible payments from pensions is the highest recorded for Q1 of any year since pension freedoms began.

Indeed, £2.46 billion was withdrawn from pensions flexibly, a 19 percent rise from Q1 2019.

And, over the same quarter, statistics from the Bank of England highlighted £7.8 billion was deposited into accounts that are accessible without penalty, which includes easy access accounts.

Moneyfacts.co.uk has warned savers preparing to apply for an easy access account that “speed is of the essence”.

This is because deals are being withdrawn, and rates are currently on the decline.

Savings market analysis by Moneyfacts.co.uk shows that the average easy access rate in May 2019 stood at 0.62 percent (on top deals at £10,000 gross), with this dropping to 0.59 percent in January 2020.

Today, these rates average at 0.32 percent.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, said: “The rise in the number of individuals choosing to withdraw their pension cash hitting a new high is slightly concerning, especially as the value of withdrawals was the highest recorded for Q1 in any year since pension freedoms began.

“Retirees may well be doing so to boost their disposable income in light of the Coronavirus pandemic, however, any immediate respite could have a devastating impact on their pension provisions for the future that they may be unable to recoup.

“One type of savings vehicle consumers appear to be using to hold their pensions cash are easy access accounts, perhaps due to their flexibility and to avoid stock market volatility, but a flood of pensions cash into this market can have consequences that may already be playing out.

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“Indeed, savings providers who are inundated with cash may pull deals entirely, add opening restrictions or cut rates to deter investors.

“The easy access market is already suffering from rate cuts and withdrawals in light of the Coronavirus pandemic and the subsequent base rate cuts, so a flood of pensions cash could result in more reductions or withdrawals.”

So, for those looking to open an easy access savings account, what does the finance expert suggest doing?

“If savers are planning to open an easy access account, then they would be wise to consider the more unfamiliar challenger banks and look away from the high street banks to find the best returns,” she said.

“Savers who keep their cash in a high street bank easy access account could be earning next to nothing, for example NatWest pays just 0.01 percent.

“In terms of the best deals, NS&I may be paying the top easy access rate today, but there is no guarantee this will stay in the pole position in the future.

“The savings market is changing quickly, so if consumers are hoping to grab the best possible return on their cash, they will need to act fast.

“It is worth pointing out that easy access accounts pay a variable rate of interest and this can change at any moment.

“Consumers would be wise to seek independent financial advice before they withdraw their pension cash so that they can understand the impact it may have on their future provisions.

“Taking cash out of a pension and putting it in a savings account may be a quick fix, but it might not be the right choice.”

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