Skipton has refreshed its range of fixed rate bonds and Isas.
The rates will increase on one, two and three-year fixed rate Isas. Increases to one and two year bonds have also been announced.
Additionally, the new range of rates will replace those previously available.
The rate increases includes Skipton’s popular one-year fixed rate Isa, increasing from 1 per cent to 1.1 per cent, and its two-year fixed rate Isa increasing from 1.25 per cent to 1.35 per cent.
The provider believes the news will be welcomed by savers who have seen an increase in interest rates at the beginning of August.
Skipton has more than 880,000 customers, £20bn of assets and a national presence represented by its network of 95 branches and three agencies.
Skipton offers mortgages, savings and restricted financial advice. It heads the Skipton Building Society Group, whose subsidiary companies include Skipton International Limited and significant interests in estate agency and related businesses through the Connells group.
In August the provider announced it was going to replace its existing cash Isa and fixed-rate bonds with new products paying a higher rate of interest.
This comes as government figures have revealed that savers are turning their backs on cash Isas.
The amount of money held in cash Isas has fallen by a third in a year, partly due to the introduction of the personal savings allowance.
Where cash Isa holders paid £58.7bn into their accounts in the 2015 to 2016 financial year, in 2016 to 2017 they paid in just £39.2bn.
A total of 1.6m fewer accounts were also started last year than in the previous one.
Provider view:
Kris Brewster, Skipton’s head of products, said: “This savings range refresh will be welcome news to savers, who have now seen two increases in the last month on these accounts.
“By increasing these rates, we’re trying to do our bit to encourage people to think of their life ahead and make sure they have a range of saving pots working as hard as they can for them.”
Adviser view:
Neil Liversidge, managing director of West Riding Personal Financial Solutions, said: “With the Bank of England monetary policy committee member Michael Saunders calling for a rise in the BoE base rate I’m not surprised to see the Skipton hiking its rates on fixed term bonds and I expect to see their competitors following suit.
“Personally I don’t find an extra 10 basis points tempting given that any increase in base rate is likely to be at least 25 and maybe 50 basis points. All the rates being offered by Skipton can be bettered elsewhere, according to www.moneyfacts.co.uk. Unexciting”
Charges:
No charges, although there are penalties if cash is withdrawn before the end of the term
Verdict:
Skipton’s plans could see other lenders follow suit, and with a market that is competitive Skipton could have a job on its hands if it wants to make a difference.
