Money blog: This savings account could bag you a free £8,500 in five years | UK News | Sky News

Live

Money blog: This savings account could bag you a free £8,500 in five years

Savings Champion founder Anna Bowes is back with tips on the savings market and how to make the most of your money. Read this and the rest of today's consumer and personal finance news in the Money blog below, and leave your thoughts in the comments box.

Why you can trust Sky News
Nike celebrates partial victory in three-stripe court battle with Adidas

Nike is celebrating a partial victory over rival brand Adidas in court, as it has been permitted to put three stripes on some of its clothing designs in Germany.

The decision came during a second appeal hearing between the two sportswear brands at a regional court in Dusseldorf.

The court previously barred Nike from using two or three stripes on five trouser designs due to a lawsuit filed by Adidas in 2022, which is on a mission to protect its trademark three-stripe design.

Following the appeal, Nike can now use the stripes on four disputed trouser designs, while a ban for one is still in place.

Adidas has filed dozens of lawsuits and signed hundreds of settlement agreements related to its three-tripe design since 2008.

Labour and Conservatives rule out VAT hikes

The Conservatives and Labour have ruled out VAT hikes if either party wins the election.

Jeremy Hunt, the chancellor, said tax rises on products and services would "hammer families' finances", while shadow chancellor Rachel Reeves said Labour did not plan to raise tax, national insurance or VAT.

The pledges come after the Institute for Fiscal Studies said the next UK government would face the toughest fiscal inheritance in 70 years.

Ms Reeves said: "I want taxes on working people to be lower, not higher."

New tax rises were restricted to those policies already announced, such as a plan to charge 20% VAT on private school fees, she said.

Writing in The Telegraph, Mr Hunt said: "We won't increase the main rate of VAT for the duration of the next Parliament."

He continued: "A VAT increase will hammer families' finances and push inflation back up."

He urged Labour leader Sir Keir Starmer to make a similar commitment "on camera".

Follow all the latest election campaign news live in the Politics Hub...

Issues for customers with major banking app

People who bank with TSB have had trouble getting into the mobile app this morning.

Many took to social media to report difficulty logging in to their accounts.

The official X account of TSB, responding to several complaints about the app being down earlier, said: "We're aware that customers are experiencing issues with our digital services. We're sorry for any inconvenience and are working hard to resolve it."

One customer reported that the app had remained down overnight:

In an updated statement, the bank said the issue has now been resolved.

"We're sorry for any inconvenience it caused," it said.

Auto Trader shares rev up after bumper results

By Daniel Binns, business reporter

Shares in Auto Trader have rocketed more than 13% to a record high this morning.

It comes after the company reported a bumper set of results for the 2023/24 financial year - including a 26% rise in group operating profits.

The online car marketplace says recent demand has been strong - and it expects its performance to continue.

Dr Martens is also up on the FTSE 250 index - despite revealing it suffered an almost 43% fall in pre-tax profits during the 12 months to March (read more below...)

Its shares climbed more than 9% at one point earlier this morning, but have since eased back to almost 6%.

The British footwear brand has said it is "confident" it can revive its fortunes and says it plans to make savings of up to £25m to turn things around.

Elsewhere, the FTSE 100 is pretty flat - it opened 0.2% down but is currently up by a tiny 0.03%.

Mining firm Anglo American is among the companies hit by falls this morning.

Its shares have dropped by just over 1% after its rival BHP Group walked away from a proposed £38.5bn takeover of the company.

On the currency markets, £1 buys $1.27 US or €1.17 (or €1.1753, to be precise).

It comes after the pound reached a 19-month high against the Euro at one point yesterday - with £1 equalling €1.1784 - before later dropping back down.

The cost of a barrel of benchmark Brent crude has dipped slightly compared to yesterday. The price is $83 (£65).

Think twice before buying your holiday clothes from Zara

If you're heading to Spain this summer and might get some of your holiday clothes from Zara, you might be better off waiting until you're over there.

The Spanish company sells items much cheaper over there - whether it's women's, men's or kids' clothes.

You can search prices in English on their Spanish website to get an idea of how much you'd save. 

We found big potential savings on just about every item we looked at - and the savings are even bigger than usual, with the pound reaching a two-year high against the euro yesterday.

For example, this white mini dress with ruffled hem is €27.95 in Spain but £32.99 (or €38.74).

A black dress described as "flowing voluminous" is €29.95 over there, but £35.99 (€42.27) in the UK.

These men's "balloon fit" jeans are €35.95 in Spain, but £45.99 (€54.01) in the UK.

A double-breasted blazer suit and trousers is €129.9 in Spain, but in the UK you'd pay £158.99 (€186.72).

Finally, a ruffled gingham kids' jumpsuit is €22.95 compared with £25.99 (€30.52).

Martin Lewis first highlighted these potential savings in 2015 when he wrote: "This isn't just about Zara similar pricing structures apply for other members of the same group, Massimo Dutti, Pull & Bear and Uterqüe."

A Zara spokesperson told the Money blog: "Zara's fashion offer is the same in the over 200 markets where it is available: quality, well-designed products at compelling prices. 

"These prices do vary between markets due to a number of factors which include shipping costs and exchange rates."

Sellers warned 'be realistic' as most homes on market in eight years

The supply of homes for sale has reached its highest level in eight years, according to a new report on the state of the housing market.

Zoopla said a 20% annual increase in properties has boosted choice for buyers and could help to steady house price growth over the rest of the year.

This idea is supported by Tom Bill, head of UK residential research at Knight Frank, who said growing supply is "one reason that UK house price growth this year will be limited to low single digits". 

According to Zoopla, the average estate agent office has 31 homes for sale - the highest level in eight years and up from a low of 16 in 2022.

The South West has seen "well above average" growth in the number of homes for sale, the property portal said, with a third more homes on the market across the region compared to a year ago.

The increase has likely been fuelled by planning changes in relation to holiday lets and the prospect of double council tax for second homes, Zoopla said.

According to Zoopla, a 13% increase in sales agreed has failed to keep pace with growth in the number of properties on the market.

Growth supply across the UK has been driven by a "rebound" in the number of three and four+ bed homes for sales as mover confidence improves, it said.

On property prices, Zoopla said there are still geographical divides with southern regions seeing "modest" falls, while the strongest price growth is seen in Belfast (3.6%), Burnley (2.5%) and Bolton (2.4%).

This compares to the biggest falls in Ipswich (-3%), Hasting (-2.7%) and Norwich (-2.4%).

The north-south divide is "primarily driven by affordability pressures in the face of higher mortgage rates", according to Zoopla - and it is expected to persist throughout 2024.

Richard Donnell, executive director at Zoopla said growth in the supply of homes for sale is "evidence of renewed confidence amongst homeowners".

Homeowners who are "serious about moving in 2024" should price their homes "realistically" to achieve a sale, he added.

Mr Bill said the "main obstacle" faced by buyers is "stubborn" inflation, which is keeping mortgage rates high.

"Asking prices therefore need to reflect the fact that buyers have more choice and tighter budgets," he said.

Prospective parents putting off having children due to cost of living crisis, poll suggests

More than a fifth of would-be parents have made changes to their plans to start a family or have put it off altogether due to the cost of living, a new poll suggests.

Inflation has pushed expenses for the average family with young children up by more than £1,000 a month, research by mutual Royal London has found.

And despite inflation falling to its lowest level in nearly three years in April, the annual rate of price rises still stands at 2.3%, meaning life is still more expensive than it used to be.

Its survey of more than 4,000 adults reveals that 22% of people aged 18 to 34 have made alterations to their family planning due to the cost of living crisis.

Some 8% of people in this age bracket said they have delayed having children due to a lack of funds.

Nearly a fifth (18%) of surveyed adults who are parents said rising costs mean they have been left with no money for unexpected bills or emergencies.

Sarah Pennells, consumer finance specialist at Royal London, said it's clear that people are now "making changes to their longer-term life plans".

"When prices for food and energy were increasing, we saw people cut back and make changes to their spending and shopping habits, but now we're seeing that some major life decisions are being delayed as people are weighing up whether or not they can afford to act on the plans they'd made."

Lender Creditspring says having children is "fast becoming a luxury that is financially out of reach for a huge number of prospective parents". 

"Millions of younger people are in the impossible position of having to choose between children and their financial security," chief executive Neil Kadagathur said.

The savings account that could bag you a free £8,500 in five years

Every Thursday Savings Champion founder Anna Bowes gives us an insight into the savings market and how to make the most of your money. This week, she's looking at Lifetime ISAs. 

With inflation falling and savings rates staying pretty stable, the majority of savings accounts are paying more than inflation. 

But if the interest is tax-free and you can benefit from a 25% government bonus on each deposit, that makes the Lifetime ISA (LISA) an even more important savings account to consider if you are eligible.

The top two accounts are not actually offered directly by banks but instead they are financial apps that use various partner banks which will vary from time to time. 

So you need to do your research to check that opening a LISA with either provider will not take you over the Financial Services Compensation (FSCS) limit, which is £85,000 per banking licence.

Introduced in April 2017, the LISA offers a much-needed boost for younger savers who are looking to save for a deposit on their first home or for retirement.

The LISA is the obvious choice for anyone aged 18-39, as you can deposit up to £4,000 a year and you'll receive a government bonus of 25% on each deposit, which you can keep as long as you use the proceeds to buy your first house - or until you are aged at least 60 as a retirement pot. 

And the proceeds are tax-free.

If you deposited a lump sum of £4,000 a year for five years, you would receive £1,000 bonus in the month after the deposit - and after five years, assuming an interest rate of 4.40%, which is the best cash LISA rate available, you would have around £28,500 - made up of:

  • £20,000 personal deposit
  • £5,000 government bonus
  • £3,500 tax-free interest

There are plenty of rules to watch out for with a LISA too, so it's important to know the restrictions as well as the benefits before committing the money. 

For example, there is a penalty for withdrawing the cash before the age of 60 for anything other than a first home purchase and the LISA must be held for a minimum of 12 months to avoid the charge.

The penalty, if it were to apply, is 25% of the amount withdrawn.

Although this would seem to simply be a return of the government bonus, it actually works out that there is an extra penalty of roughly 6.25% that will apply. 

So, as well as losing the bonus, some of the money deposited would also be taken.

A LISA can be held in cash or in stocks & shares. 

The most appropriate choice would depend on timelines, with shorter term funds usually better kept as cash and invested stocks and shares ISAs being more suitable for long-term money (five-plus years). 

Any interest or growth would be tax-free within that Lifetime ISA wrapper.

Best of the Money blog - an archive

If you've missed any of the features we've been running in Money this year, or want to check back on something you've previously seen in the blog, this archive of our most popular articles may help...

MAY

APRIL

MARCH

FEBRUARY

JANUARY

Profits down at Pets at Home as owners spend less on toys and accessories

By Daniel Binns, business reporter

Pets At Home has reported a dip in profits – which it has partly blamed on owners spending less on toys and accessories for their animals.

The chain, which also provides vet services, said pre-tax profit for the year to March was £105.7m, down 13.7% on the same period the year before.

The retailer said on Wednesday that profitability had been "impacted by short-term availability issues as we transitioned to our new DC [distribution centre] and weaker performance of discretionary accessories".

However, the company also said it was confident in its growth strategy and insisted it was "not threatened" by a new watchdog investigation into the vet industry.

The Competition and Markets Authority recently launched the probe following concerns that pet owners could be paying too much for healthcare.

Pets At Home also reported that revenues for its vet business jumped 16.8% as it continued to expand into the sector.

It said total revenue grew by 5.2% to £1.5bn for the year.