FA - Product Adviser - Skipton BS unveils new range of fixed-rate bonds and Isas

With increased rates, the new products will replace those currently on sale. The rate increases include Skipton’s one-year fixed rate Isa, increasing by 0.25 percentage points to 1 per cent from 0.85 per cent.

Its two-year fixed rate bond will increase by 0.2 of a percentage point to 1.3 per cent from 1.1 per cent.

This rate increase follows the launch of the cash Lifetime Isa (Lisa) on 6 June. Since then, 28,000 people have opened an account.

Skipton said the cash Lifetime Isa had been popular with younger savers who were looking to take advantage of the government’s bonus. More than half (51 per cent) of those who have opened an account are under the age of 30, because they hope it will boost their savings to help them to get on the property ladder.

Meanwhile, mutual society Scottish Friendly has called for an overhaul of the Lisa. It has said the current structure of the new savings product is flawed adding the government needs to make changes.

The society wants consumers who save or invest through a Lisa to be able to benefit from employer contributions in the same way as those who invest in a pension.

It also said Lisa products should be accepted as auto-enrolment savings vehicles if they are to be on a level playing field with pension products.

In a report, Scottish Friendly has laid out six changes it wants made to the structure of Lisa products, including removing the age restriction so those aged over 40 can also open accounts.

Provider view

Kris Brewster, Skipton’s head of products, said: “This week, we are really showing our support for UK savers. Not only are we offering the UK’s only cash Lifetime Isa – supporting more than 28,000 young people in saving for their first home or retirement, but we’re also increasing our fixed savings rates to give people a better return on their money.

“We know savers have had a tough time and the economic climate shows little sign of improving. But we’re trying to do all we can 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

Daren O’Brien, director at Aurora financial Solutions, said: “These rates offered seem to be a positive step for building societies who, until now, haven’t really offered savers a low-risk option for a good return on their savings.  

“I can see it being really popular for some of our clients who have had low interest rates and disappointing fixed rates for such a long period of time.

“On the back of their announcement about Isas, they seem to be back in the market putting their name out there.”

Charges

Not applicable.

Verdict

The offering is good news for savers who might ordinarily look at riskier options for a good return.