JEFF PRESTRIDGE: Now is the time to lock the floating rate mortgage
JEFF PRESTRRIDGE: With interest rates unchanged, now is the time to fix this for those two million homeowners who have adjustable rate mortgages
After all the speculation and all the straw polls that pointed to an interest rate hike, interest rates will remain at 0.1 percent for the time being.
Good news for homeowners who have a variable – rather than a fixed – mortgage. Bad news for savers who will continue to make the equivalent of peanuts on the money they consumed in their local building society. Peanuts are tacitly ravaged by inflation.
While savers might get a little pre-Christmas cheer next month when the Bank of England’s Monetary Policy Committee takes a new position on interest rates, I wouldn’t bet.
Highs and lows: The arguments for setting your home loan interest remain convincing
Even if the base rate can rise in four weeks, this does not automatically mean that savers will benefit from it. Banks – and to a lesser extent building societies – are notoriously thrifty when it comes to passing the benefit of any rate hike on to savers.
Some not, others postpone until the turn of the year – and then only pass on a fraction of the increase. For homeowners, the cost of new loans (particularly fixed-rate deals) rose in anticipation of a rate hike. I doubt that given the Monetary Policy Committee’s decision to leave things that way, lenders will now reverse those increases.
Yet the arguments for setting your mortgage rate remain compelling. Now is the time to remedy the situation for the two million homeowners who have adjustable rate mortgages.
A decent society must take care of its elders
The House of Commons has barely covered itself with glory in the last few days. But it has a chance of redeeming itself in just over a week if MPs consider a Lord’s amendment to the government’s controversial decision to suspend the “triple lock” guarantee on state pension increases.
A suspension that means that the state pension will be increased by 3.1 percent starting next April – and not the 8.3 percent by which it could have increased if the fixed earnings were retained.
The daring Baroness Ros Altmann led the Lords campaign against breaking the triple lock. Cleverly, she does not argue for the full 8.3 percent increase. Instead, she wants an increase that takes into account the impending inflation (five percent, even more), which will put a strain on the household finances of many retirees in the next year.
Altmann says a decent society should take care of its old people. She also finds it disgusting that retirees are being underserved to fund cuts in both alcohol taxes and taxes in the country’s banks. Many readers will agree. It’s hard not to.
Redmayne Bentley makes it difficult for customers to vote at general meetings
How disappointing it was to learn from a reader that stockbroker Redmayne Bentley is going against the crowd by making it difficult for its customers to vote at general meetings. To discourage them from engaging with – rather than empowering – the companies they are involved in.
In an email to customers, Redmayne said it will no longer alert customers to upcoming general meetings and shareholder votes (e.g., on important topics such as a takeover or rights issue) so they can attend.
Instead, those who want to get more involved with the companies they invest in need to do most of the work themselves and figure out when annual general meetings or important shareholder votes are taking place. You will then need to email Redmayne details of your voting instructions which will then be forwarded to the “Relevant Parties to be Arranged”.
As in retrospect, especially given Interactive Investor’s resourceful decision last week (which was revealed exclusively in Wealth) to automatically include all investors in its voting service. This means that Interactive’s customers now receive details on upcoming votes and can then cast their vote at the push of a button.
Redmayne prides itself on providing personal investment expertise since 1875. But in this case it is terribly absent and should urgently reconsider its decision to make life difficult for investors who have an interest in the companies in which they are involved.