Brits Benefit From Improved Rates in 2012

CHESTER, England, January 9, 2012 /PRNewswire/ --

• Good news for savers - average savings rates have crept up by 0.23 per cent since 2011
• Average personal loan rates at £7,500 drop by 1.20 per cent to lowest levels since October 2007
• Mortgages rates down across top five 2, 3 and 5 year fixes and 2 year trackers
• Record promotional periods offered on credit cards

Brits wanting to kick start 2012 with a financial bang are set to reap the rewards from greater competition in the market with the average savings rates up, average mortgage rates down, lower APR's on loans, and record promotional deals on credit cards, according to analysis* by MoneySupermarket.com.

The UK's number one comparison site compared the current deals on a range of popular financial products including personal loans, savings accounts, mortgages and credit cards, to those offered in January 2011 and found some good news for savers and borrowers.

Savings

The average top five easy access account rate has increased by 0.23 per cent in twelve months to 2.97 per cent and the average top five bonus rates are also up by 0.5 per cent from the same time last year. Similarly, the average rate on one year fixed rate ISAs was 2.99 per cent in 2011 and is currently 3.17 per cent. Two year fixed rate ISA rates have also increased, by 0.36 per cent to 3.54 per cent. In addition, the average top five rates for one year and two year fixed rate bonds based on £10,000 have both increased by 0.46 per cent, meaning those who want to lock away their savings now will benefit more than those doing so last January.

Kevin Mountford, head of banking at MoneySupermarket.com, said: "Savers have suffered from a low base rate environment for almost three years so it's encouraging to see banks and building societies increasing competition to attract savers, offering attractive headline rates compared with a year ago. However, with the majority of savers sitting on low rate accounts I would urge consumers to take advantage of this renewed competition and shop around to ensure they have the best savings deal for their needs. Even if you cannot afford to lock away your savings, the top paying Easy Access accounts are still paying over six times that of Bank of England base rate."

Borrowing

Recent rate cuts from lenders such as M&S Money, and Tesco, has meant the average rate for a loan of £7,500 is now the lowest it has been since October 2007.  The average top ten personal loan rate at £7,500 has fallen 1.20 per cent to 6.67 per cent. This means anyone borrowing £7,500 over five years would save on average £239 in interest compared with the previous year.

Across mortgage products, average rates have decreased across two, three and five year fixed rate mortgages, with a five year fix down as much as 0.67 per cent on average. The average rate on two-year tracker mortgages has fallen by 1.51 per cent. While the overall number of mortgage products available has decreased in 2012, the total number of products available for those with smaller deposits has increased. The number of loans for those with a Loan to Value (LTV) of 85 per cent has jumped by an additional 115, and for 90 per cent mortgages, an increase of 70.

The analysis also looked at credit cards, and found the average APR has increased slightly by 0.13 per cent to 18.41, with a 0.26 per cent increase on cash advance rates. However, the good news for anyone looking for a new card is the average promotional length on credit cards is at a record high. The average length of 0 per cent balance transfer offers is 22.4 months, compared to 16.2 months this time last year. Likewise, the average 0 per cent purchase offer is now 15.4 months compared to 12.4 months in 2011.

Kevin Mountford continued: "There is no doubt that the appetite for lenders to attract new customers has increased and the news that average loans rates have dropped significantly as competition in the market heats up is great for those needing to borrow at the moment. We've recently seen M&S Money reducing its rate on £7,500 loans to six per cent - the lowest for four years, and it is likely we will see further reductions in the coming weeks.

"Last year saw a number of new credit card offers with increased promotional periods on purchase and balance transfers. Barclaycard, for example, offers a staggering 24 months interest free on balance transfers on their card, which is great for anyone looking to consolidate their debts. However, as our findings show, lenders have balanced this out by increasing the average APR slightly.

"With many people making financial resolutions in 2012, a shift in average rates for products compared with the same time last year means now is a good time for those looking to switch and get more bang for their buck. Using a comparison site such as MoneySupermarket.com is a good way to look across the various products offered. I would always advise consumers to take the time to research beyond the headline rate to find the best product to suit their needs and circumstances."

Notes to Editors:

*MoneySupermarket.com compared the average rates in January 2011, data as at 9^th January 2012

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MoneySupermarket.com compares (at 22^nd December 2011)

• 86 car insurance providers and 78 home insurance providers
• 11 broadband providers and 18 energy providers   
• 30 unsecured loan and 5 secured loan providers
• 62 mortgage lenders and 25 credit card providers
• 70 savings providers and 36 current account providers.
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Paul Lawler
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SOURCE moneysupermarket.com