How the banks are squeezing you to save you up to 300 million pounds sterling due to the increase in rates

Banks will raise as much as £ 300 million from last week's rate increase, as they try to get away from the savers' approval

Banks will raise as much as £ 300 million from last week's rate increase, as they try to get away from the savers' approval

Banks will raise as much as £ 300 million from last week's rate increase, as they try to get away from the savers' approval

Banks will get as much as £ 300 million from last week's rate increase, as they try to dodge savers' approval.

Money Mail may reveal that the Royal Bank of Scotland (RBS) expects its revenues to increase by £ 300 million in 2020 as a result of the Bank of England announcement.

Other banks are also expected to earn millions more as they squeeze cash from loyal borrowers and current account customers.

Four major banks and construction companies, Lloyds, Barclays, Nationwide and TSB, have said they will pass on the interest rate increase to mortgage customers. In addition to this, in recent months companies reduced the advantages of current accounts and increased the rates of credit cards.

Just last week Lloyds Banking Group revealed that its earnings had increased by almost a quarter to £ 3.1 billion in the first half of the year.

HSBC also reported a 4.6 percent increase in its six-month earnings to £ 8.3 billion. RBS announced last week that it would pay its first dividend to investors in ten years after reporting earnings of £ 1.8 billion.

Ewen Stevenson, chief financial officer and executive director of RBS, told analysts that the firm was hoping to get even more money from the rate hike. Barclays and Santander reported declines in earnings, but still earned £ 1.7 trillion and £ 903 million respectively. Here, Money Mail explains how banks raise it while savers suffer.

THE MORTGAGE COSTS ARE UP

Mortgage borrowers have enjoyed unprecedented interest rates for many years, and some owners have been able to close fixed two-year agreements of up to 1 percent. But as interest rates start to rebound, lenders look for ways to make money with their customers.

About 1.3 million borrowers with mortgages tracking the base rate of the Bank of England have already seen their rate rise from last week, with some clients reporting they had received emails and text messages informing them that their bills would increase minutes after the announcement.

Another 1.8 million are in what is known as the standard variable rate of your lender. Unlike a fixed agreement, which is protected against any rate increase during the term of its mandate, banks and building societies can increase the cost of their standard variable agreements at any time.

Mortgage borrowers have enjoyed unprecedented interest rates for many years, and some owners have been able to close fixed two-year agreements of up to 1 percent. But as interest rates start to rebound, lenders look for ways to make money with their customers

Mortgage borrowers have enjoyed unprecedented interest rates for many years, and some owners have been able to close fixed two-year agreements of up to 1 percent. But as interest rates start to rebound, lenders look for ways to make money with their customers

Mortgage borrowers have enjoyed unprecedented interest rates for many years, and some owners have been able to close fixed two-year agreements of up to 1 percent. But as interest rates start to rebound, lenders look for ways to make money with their customers

And less than a week after the Bank of England's decision to raise rates, Barclays, Lloyds, Halifax, Nationwide, TSB, the Cooperative Bank Platform brand, Skipton BS and Danske Bank have already said they will transfer the 0, 25 percent total. hike.

It means that anyone who does not realize that their cheap fixed offer expired, or is trapped in the standard variable rate (SVR) of their lender because they do not comply with the new affordability rules, will see their monthly mortgage bills jump.

Someone with an average standard variable rate of 4.72 percent, for example, will see his rate go up to 4.97 percent. In a typical loan of £ 150,000 taken over 25 years, monthly repayments would increase from £ 853 to £ 874, an extra £ 252 per year.

Banks have been accused of treating loyal customers like cash cows, and the gap between what lenders charge new customers and those in an SVR has quintupled over the past six years.

For example, the Yorkshire Building Society currently offers new customers with a 35 percent deposit a two-year surcharge of 1.35 percent, while those with their standard variable rate pay 4.99 percent. In a typical mortgage loan of £ 150,000 taken for 25 years, this is an extra £ 3,444 per year.

The change to a fixed rate agreement will protect borrowers from rate increases, but if you have waited until now to do so, you may find that you have missed the best deals.

Some banks and development companies began to raise fixed mortgage rates since April, when the Bank of England was widely expected to vote to raise interest rates in May. However, when no change was made, the lenders did not lower their rates again

Some banks and development companies began to raise fixed mortgage rates since April, when the Bank of England was widely expected to vote to raise interest rates in May. However, when no change was made, the lenders did not lower their rates again

Some banks and development companies began to raise fixed mortgage rates since April, when the Bank of England was widely expected to vote to raise interest rates in May. However, when no change was made, the lenders did not lower their rates again

Some banks and development companies began to raise fixed mortgage rates since April, when the Bank of England was widely expected to vote to raise interest rates in May. However, when no change was made, the lenders did not lower their rates again.

In January, borrowers seeking to hold on to a two-year fixed-rate mortgage would have paid an average 2.35 percent, according to Moneyfacts data analysts. In May, the average rates for the two-year agreements had increased to 2.51 percent, and today they are at 2.53 percent. Fixed five-year rates have also increased, but at a slower pace, from an average of 2.87 percent in January to 2.9 percent in May, and 2.93 percent in July.

About 28 mortgage lenders also raised their fixed rates in July before last week's rate increase, but many of the changes were small since lenders did not want to deter new clients.

Meanwhile, mortgage rates are increasing. The average rate of a fixed mortgage agreement is now £ 1,028, from £ 1,019 at the beginning of the year, according to Moneyfacts.

SOAR CREDIT CARD RATES

The interest rates on credit cards have reached an almost record level in the last nine years. When the base rate of the Bank of England plummeted to 0.5 percent in 2009, the average rate of credit cards was 15.72 percent, according to official figures. However, despite the fact that interest rates remain low, the average annual percentage rate (APR) has risen by almost three percentage points to 18.26 percent.

It means that someone with a typical balance of £ 1,000 would pay around £ 183 in interest over the course of a year compared to £ 157 before – an extra £ 26.

And the rates continue to increase in inches. Since March of this year, the Bank of Scotland, Halifax, HSBC, Lloyds, M & S Bank, Post Office Money and Sainsbury & # 39; s Bank increased their annual interest rates on credit cards by a percentage point of 18.9 percent to 19.9 percent. Experts say that companies give a number of reasons, together with broader interest rate increases, to raise rates.

The interest rates of credit cards have reached an almost record level in the last nine years

The interest rates of credit cards have reached an almost record level in the last nine years

The interest rates of credit cards have reached an almost record level in the last nine years

For example, if the regulator finds evidence that credit card loans are reaching dangerous levels, companies can raise rates to postpone the most risky borrowers.

The cost of transferring debt to an interest-free card has also increased. At the beginning of the year, the average balance transfer rate was 2.04 percent, according to Moneyfacts. Today is 2.15 percent. For a balance of £ 2,000 this would mean paying £ 43 instead of £ 40.80.

Figures from the Office of National Statistics show that households spent more than they did last year for the first time since 1988. The average family had a deficit of £ 900, but banks are still encouraging us to borrow more on cards.

Citizens Advice has warned that some banks are increasing credit limits without customers requesting an increase. Nearly six million people received an increase in the uninvited credit limit in a 12-month period, an average increase of £ 1,481.

Best credit card purchase

ACCOUNT ACCOUNT ACCOUNTS TAKEN

Current accounts that pay interest and reward customers with money back have become very popular among savers looking for ways to increase their profits. The easy-access average savings account currently pays around 0.21%. In comparison, some current accounts, such as the Nationwide FlexDirect account, offer savings of up to 5% in balances of up to £ 2,500.

However, after attracting customers with attractive offers, banks are increasingly cutting back on the advantages they offer, reducing rates and excursion fees. Santander launched its popular 123 account in 2012 at a cost of £ 2 per month, or £ 24 per year.

Save money and get the best deals

In return, customers were paid up to 3% in balances up to £ 20,000, as well as 1% reimbursement in water, municipal taxes and mortgage repayments from Santander, 2% in energy bills and 3% in mobile phones, band Wide and TV bills

It meant that if someone had a maximum of £ 20,000 in the account, they could earn more than £ 576 after taking into account the annual fee of £ 24 and before any refund was added.

But in January 2016, Santander more than doubled its monthly rate from £ 2 to £ 5. Subsequently, customers received a second blow that same year, when the bank cut the maximum interest rate it paid to customers of 3 percent. to 1.5 percent in balances of up to £ 20,000. It means that customers can now only earn up to £ 240 a year after fees and before reimbursement.

Other banks soon followed with cuts. The Lloyds Club account of Lloyds Bank previously paid up to 4 percent in balances of up to £ 5,000. If customers keep the maximum of £ 5,000 in their account, they could earn £ 200 per year.

But in January 2017, Lloyds reduced its rate to only 2 percent in balances between £ 1,000 and £ 5,000, reducing the maximum return to £ 100 a year. Then, just as banks and development companies were preparing for a rate hike in July of this year, Lloyds again lowered its rate. Now he pays customers only 1.5 percent, or £ 75 a year.

TSB also reduced the interest rate on its Current Plus account by 5 percent in balances of up to £ 2,000 to 3 percent in balances of up to £ 1,500. He reversed the decision as clients threatened to leave after the IT disaster in April.

In July, Bank of Scotland, part of Lloyds Banking Group, reduced the interest rate on its Vantage account from 2% to 1.5% in up to £ 5,000.

Halifax, which is part of the same banking group, announced last month that it would reduce the monthly payment of its Reward and Ultimate Reward current accounts from £ 3 to £ 2 per month as of October 1.

Halifax, Lloyds and the Bank of Scotland have also increased the fees they charge in their current accounts packaged at £ 2 per month. The Lloyds Platinum account now costs £ 19 instead of £ 17 for an offer that includes telephone coverage and breakdown.

Santander and Lloyds Banking Group declined to comment on whether their current account rates and benefits would be increasing as a result of the increase in last week's base rate.

Best current accounts

OVERGRADES RATE IN BILLIONS

Banks obtained around £ 2.3 billion in overdrafts in 2016, according to the city regulator. The majority of this came from planned overdrafts, with just under a third compounded by charges for unauthorized overdrafts.

This is where customers have accidentally fallen into red without warning their bank and face heavy penalties. According to the Financial Conduct Authority (FCA), around 13 million Britons use overdrafts and in the worst case pay up to £ 450 per year in tariffs.

Currently, if customers exceed an agreed overdraft limit, they are generally charged a fixed fee of between £ 5 and £ 10 per day, which means that they pay the same charges regardless of how much they exceed the agreed limits. Customers usually pay between 0.1% and 0.5% per day in interest for an agreed overdraft, but this shoots up to more than 10% when it is not authorized.

NatWest charges its selected customers from the current account a monthly fee of £ 6 plus an interest of 19.89 percent for overdrafts agreed in advance.

NatWest charges its selected customers from the current account a monthly fee of £ 6 plus an interest of 19.89 percent for overdrafts agreed in advance.

NatWest charges its selected customers from the current account a monthly fee of £ 6 plus an interest of 19.89 percent for overdrafts agreed in advance.

NatWest, for example, charges its customers from the current Select account a monthly fee of £ 6 plus an interest of 19.89 percent for overdrafts agreed in advance. If he borrowed £ 500 per week, he would pay £ 7.75, the equivalent of 81 percent interest, according to Moneycomms, the personal finance site.

Some banks are reviewing their rates as the City regulator investigates whether clients receive fair treatment. But not everyone ends up better. Lloyds, for example, eliminated unauthorized overdraft fees in November. Customers now pay 1p for every £ 7 of overdraft used for more than £ 100.

Under the above rules, a Club Lloyds customer with an authorized overdraft would have paid £ 6.22 for a £ 250 loan for three days, according to Moneycomms. Now they pay only 63p. But those who need to submerge more in their overdraft will pay more than before. Previously, borrowing £ 2,000 for 12 days would have cost £ 17,47. But now it's almost double that at £ 32.76.

The new rules introduced in May mean that banks will have to send text message alerts to customers when they enter their overdraft, be more clear about fees when people open accounts and offer online tools that explain charges more clearly .

The FCA says that these proposals are expected to save customers up to £ 140 million a year. The regulator is also considering a general price cap and the prohibition of fixed daily rates in favor of interest charges.

Outraged by your overdraft fees? Read the guide of the main current accounts for overdrafts without commissions

The index was a smart move?

Some have been asking for an increase in the rate for a long time, while others believe that we should try to get back to normal before the recession comes.

But those who oppose believe that even this small change to a very low base level of 0.75 percent is a bet too far from the Bank of England.

In this podcast, Simon Lambert, Lee Boyce and Georgie Frost are submerged in the rate increase.

Why the bank raised rates, who will it affect, why interest rates even go up and down, and how did they end up at 0.5% in the first place?

More importantly, how high will they go now and how fast?

(function() {
var _fbq = window._fbq || (window._fbq = []);
if (!_fbq.loaded) {
var fbds = document.createElement(‘script’);
fbds.async = true;
fbds.src = “http://connect.facebook.net/en_US/fbds.js”;
var s = document.getElementsByTagName(‘script’)[0];
s.parentNode.insertBefore(fbds, s);
_fbq.loaded = true;
}
_fbq.push([‘addPixelId’, ‘1401367413466420’]);
})();
window._fbq = window._fbq || [];
window._fbq.push([“track”, “PixelInitialized”, {}]);
.