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Cash Savings

Cash Savings

Information accurate as of 21/07/2022

With the Bank of England base rate at 1.25% and UK inflation hitting 9.4%, it is important to ensure you’re reviewing cash savings to get the best rate possible. To mitigate the risk of losing the buying power of your savings this blog will introduce some of the market leading, Financial Services Compensation Scheme (FSCS) protected accounts available to savers. 

The context of interest rates rising is in response to roaring inflation. The snippet below from the Bank of England illustrates how rates have changed in the last ten years.

Source: Bank of England

We have another rate review from the Monetary Policy Committee (MPC) on the 4th August, with analysts suggesting we could see rates hike to 1.75%. Whilst this isn’t certain, financial markets have set a 94% probability we’ll see the 50bps rise. 

Given we have frequent rate reviews ahead, it may be sensible for savings to consider a range of fixed and variable term savings accounts to hedge rates going even further. Some analysts predict we could hit close to 3% in the next 18 months, dictating a flexible savings vehicle would suit a cautious saver.


Premium Bonds from National Savings & Investments have long been a popular choice for savings. The possibility of winning big motivates savers, so it feels like a safe ‘chance’ for large prize winnings. Importantly, money with NS&I is 100% protected from the Treasury, meaning you can ignore the FSCS rules and safely house savings of £85,000+ in value. 

At present the interest rate on premium bonds equates to a 1.40% annual prize fund rate, with all prizes being completely tax free. The maximum winnings are £1million with over 1.4mn winners in June 2022. 

Outside of Premium Bonds NS&I aren’t very market competitive, offering a low 0.5% for their direct saver and 0.35% for their direct ISA. For fixed term, they offer an income bond for two years at 2.2%.

Easy Access Savings

As noted, many savers are opting for instant access to give flexibility for rate rises and access for the impending hikes in their cost of living. Interest rates are usually therefore lower than on fixed savings periods, but the flexibility benefits can outweigh this disadvantage. At present we’d advise on the following easy access savings accounts from the open market:

  1. Chase Bank – an app based bank offering 1.5% AER on savings with a minimum of £1 deployed. They also offer 1% cash bank on debit card spends and a 5% interest on purchase round ups, making them our top choice for flexible, tech savvy savers.
  2. Shawbrook Bank – Shawbrook are offering a higher interest rate at 1.52% but with a minimum of £1,000. Here access is flexible, but you can only withdraw in chunks of £500
  3. Al Rayan – A sharia account, offers 1.6% interest with flexible access for balances over £5,000. They allow instant access with no limits attached.

Fixed Term Savings

Instead of saving in variable rate accounts, savers have the option to fix for between 1 and 5 years plus. For a 1 year fixed we’ve found the best rate to be with My Community Bank, coming in at 2.76% per annum, with a minimum balance of £1,000. Second to this is the Woodland Saver from Gatehouse Bank at 2.75% or Kent Reliance at 2.71%. 

For a two year fixed we have 3.1% at Gatehouse Bank, with five years rising to 3.45% from PCF Bank Limited. Given the difference between these shorter term and longer term accounts, we would advise on shorter term fixing to price in the probability rates will continue to rise for savers until the Bank of England is closer to its inflationary targets.

Cash ISAs

Cash ISAs have long been seen as lower yielding than savings, meaning advisers encourage investors to use their ISA allowance for stocks & shares, and keep emergency cash in savings accounts. We continue to see this theme today, with the top immediate access cash ISA coming in at 1.5% interest from Newcastle Building Society, lower than that of Shawbrook instant access. 

Alternatively fixed rate ISAs for three years will offer 2.75% at Aldermore, or 2.56% from Virgin Money for two years fixed. The two year fixed offerings sit over 0.5% lower than the fixed term non-ISA savings. 

Of course cash ISAs benefit from all interest being tax free, but savers should bear in mind their personal savings allowance. For basic rate tax payers this is £1,000 per annum, higher rate £500 and additional rate £0. This means a basic rate tax payer with a Chase Bank Account would have to have over £66,500 saved to breach the threshold. In the instance a zero risk, higher or additional rate taxpayer who wants this liquid, the NS&I options of Premium Bonds (capped at £50,000) or growth bonds become more plausible.

Concluding Points

Given the central banking intention towards decreasing inflation we expect to continue to see rate rises until we have signs headline inflation is falling. The Governor of the Bank of England isn’t ruling anything out; therefore we’d expect markets to be pricing in a certain level of rate rise from central banks over the coming years. 

Below is a visual from the OIS forwards data sourced by JP Morgan. Here we can see the UK figures at the 3-4% point in the next twelve months, stabilising down to nearly 2% in ten years.

This is coupled with the view inflation will peak in Q3 of 2022, seeing a forecast fall from the fourth quarter of the year.

Given these challenges we would encourage savers to split savings between flexible and fixed rates, with Chase Bank and Gatehouse Bank offering strong product ranges. We’d also suggest maximising the premium bond threshold of £50,000 for zero risk investors or those concerned with FSCS thresholds for savings. 

Please note that these types of products are not suitable for all clients and that this should not be taken as personal advice. All investments can go up and down in value and therefore you could get back less than you invest. Past performance is not a guide to the future.

Written by: Catriona McCarron

21 July 2022

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Investing for the future

Investing for the future

The ice caps are melting, temperatures are soaring and wildlife is struggling, all down to the need to power our modern lives. With 75% of adults in Great Britain worried about the impact of climate change, and a further 43% feeling anxious about the future of the environment more widely (Office for National Statistics, 2021), it’s becoming ever clearer that there is a global need to rectify the injustices we have done to our planet. 

People, governments and companies alike are now scrambling to be at the forefront of these efforts, and what is a more effective way to attain this than starting with changing how we invest?

Ethical Investing

In its purest form, ethical investing is the strategy in which investments are chosen based on one’s ethical code. It strives to support those industries actively trying to make a positive impact, and of course create an investment return. 

The idea of what is ‘ethical’ is will differ from person to person, with some opting for the ‘do no harm’ route, where they will guide their investments by specific cases e.g. avoiding buying shares in Activision Blizzard, Inc. due to the recent sexual harassment scandal, or avoiding so-called sin stocks: tobacco, gambling or weapons organisations to name a few. 

Alternatively, other people will opt for the ‘do good’ route, in which they will support those companies that are tackling ESG issues head-on. E.g. buying Beyond Meat shares due to the positive impact the company has had on the environment as a result of using 93% less land, 46% less energy, and produced 90% fewer greenhouse gas emissions in the production of its’ Beyond Burger compared to its cow counterpart.

The point is that ethical investing is personal to you, and whilst there is no correct way to conduct this strategy, the most effective way will be a combination of both tactics, in order to create a well-diversified portfolio.

How effective is Ethical Investing

As with all investing approaches, there are associated benefits and drawbacks, and the ethical strategy is no different. On a positive note, ESG UK funds have outperformed non-ESG UK funds over 3 and 5 year periods. Furthermore, there is a general idea that companies more concerned with ESG issues are usually ran better and less prone to scandal, which will lead to further material benefits. On the whole, there is the chance for profits, and to feel good doing it!

Of course, ethical investing will experience peaks and troughs just like other strategies. It is important to be mindful of the fact that whilst returns are attractive, there are risks involved. To start, this approach limits your options. Many of the top performing companies have characteristics that fail to meet ethical fund’s criteria, and so are ruled out. Furthermore, just because a company aligns with your own moral compass, there is no guarantee of absolute return.

Is ethical investing for me?

When investing in these types of funds, or employing this particular strategy, it is important to think about your own long term goals, as well as being wary of how much of your capital you are willing to put at risk.

Contact us for advice on your investing needs. We have an array of passionate and knowledgeable advisers ready to take on board any ethical considerations you may have when investing. We can help you too!

Please note that these types of products are not suitable for all clients and that this should not be taken as personal advice. All investments can go up and down in value and therefore you could get back less than you invest. Past performance is not a guide to the future.

Written by: George Kemp

21 July 2022

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Blog Article – Gold’s Yin to the Stock Markets Yang

Gold’s Yin to the Stock Markets Yang

Do we have a Gold bubble?

Many people believe in the idea of a Gold bubble. A bubble occurs when the price of an asset quickly increases without any obvious reason or cause to suggest a higher value. The price of gold mainly rises simply just because people think it will. It is very hard to place the real value of Gold as it doesn’t directly yield income, which is why speculators increase the price of gold beyond its intrinsic value, resulting in the gold bubble. 

The price of gold can fall, however it is very unlikely that it will fall below the amount it costs to dig it out the ground and to bring it to the market. If in the unlikely event it does fall below these costs, the extraction of gold will rapidly slow down, increasing demand, which will push the prices back up again. This is why most financial advisors would use gold in their clients’ portfolios as it is seen as a safe asset and a good hedge against inflation, however there is no fundamental reason that it’s value should increase when the pound falls.

The effects of a stock market crash on gold

There are many questions from investors on when the best time to buy gold is, and if it can be used to weather the storm in a stock market crash. 

The below table shows the performance of gold during the past stock market crashes.

Out of the 9 stocks market crash scenarios shown in the table, there was only one occurrence of gold falling more than the S&P, and more importantly 6 out of the 9 scenarios shows the value of gold increasing when the S&P is falling. The 2 yellow columns show that gold fell when the S&P fell, but at a lower rate, showing that is would’ve still been more beneficial for investors to be invested in gold.

The reason for this negative correlation between the performance of the S&P and gold is because when there is high levels of fear due to the stock market falling, investors tend to invest in gold as it is seen as a ‘safe haven’. Similarly, if the stock markets are performing exceptionally well, investors are more likely to take advantage of this opportunity and deflect their attention from investing in gold.

Should I invest in gold?

In the current climate with confidence in politics and the worldwide climate at an all-time low, gold can act as an important part of investments portfolios to help preserve wealth and possibly make a positive return in times when markets are falling. The gold market has the advantage of a high liquidity that allows investors to easily sell their gold for cash. 

However, just like any other investment, it is important to consider the time frame you are looking to invest for, and the likelihood of you needing to access that money. It is essential to make sure your portfolio is diversified. Investing in gold can help to diversify a portfolio as when a market declines, the price of gold has historically increased.

Please note that these types of products are not suitable for all clients and that this should not be taken as personal advice. All investments can go up and down in value and therefore you could get back less than you invest. Past performance is not a guide to the future.

Written by: Jemma Long

12 July 2022

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WEBINAR: Peer To Peer Lending

For our next webinar, Claire and Sam will be continuing on from Junes theme of alternative investment strategies. This coming month, on the 24th of August, we will be focusing on peer-to-peer lending

Join Claire and Sam for 45 minutes to 1 hour of learning everything you need to know about Peer to Peer lending.  

What will be covered?

  • Diversification of income sources
  • Uncorrelated returns to market
  • Safety of investment
  • The Various options available

Those who register to the event will be sent reminder emails leading up to the day and time of the webinar.


Contact Us For More Info