Money
UK energy firm with 5.22million customers is giving thousands a £150 discount – when you’ll be paid
A MAJOR energy firm with more than five million customers is set to pay thousands of customers a £150 discount on their bills.
EDF Energy is giving eligible customers extra cash through the Warm Home Discount to help lower bills this winter.
The eligibility requirements for the Warm Home Discount are the same as last year.
Between now and December, the government will issue letters to households that are eligible for the scheme.
EDF Energy has now said that it will aim to pay the discount by the end of February 28, 2025.
However, payments could begin being issued as early as next month.
To qualify for the Warm Home Discount, you need to claim either the guaranteed credit element of pension credit or a different qualifying benefit form the list below:
If you weren’t claiming any of the above benefits on August 11, 2024, you won’t be eligible for the payment.
Where someone claims a qualifying benefit, the government will assess their energy costs based on the type, age and size of property.
This means that you may not be considered eligible for the Warm Home Discount if you live in a more energy-efficient property for instance, even if you receive a qualifying benefit.
However, this rule doesn’t apply to recipients of the guarantee credit portion of pension credit.
Around 800,000 pensioners are eligible for pension credit but not claiming it.
As well as missing out on a £300 winter fuel payments, they won’t get the £150 Warm Home Discount payment.
Even if you weren’t getting pension credit on August 11, thousands of pensioners who apply for the benefit now can still qualify for the £150 payment.
This is because pension credit rules allow first-time claimants to backdate their benefit entitlement by three months.
So you’ll need to launch your claim by Friday, October 11 and then successfully get it backdated to cover the August 11 Warm Home Discount qualifying date.
But if you fail to apply before this date you’ll miss out.
What is pension credit and how do I apply?
PENSION credit tops up your weekly income to £218.15 if you are single or to £332.95 if you have a partner.
This is known as “guarantee credit”.
If your income is lower than this, you’re very likely to be eligible for the benefit.
However, if your income is slightly higher, you might still be eligible for pension credit if you have a disability, you care for someone, you have savings or you have housing costs.
You could get an extra £81.50 a week if you have a disability or claim any of the following:
- Attendance allowance
- The middle or highest rate from the care component of disability living allowance (DLA)
- The daily living component of personal independence payment (PIP)
- Armed forces independence payment
- The daily living component of adult disability payment (ADP) at the standard or enhanced rate.
ou could get the “savings credit” part of pension credit if both of the following apply:
- You reached State Pension age before April 6, 2016
- You saved some money for retirement, for example, a personal or workplace pension
This part of pension credit is worth £17.01 for single people or £19.04 for couples.
Pension credit opens the door to other support, including housing benefits, cost of living payments, council tax reductions, the winter fuel payment and the Warm Home Discount.
You can start your application up to four months before you reach state pension age.
We’ve explained everything you need to know about EDF Energy‘s scheme below.
Do I need to apply for the discount?
Households in England and Wales don’t have to apply to get the cash and receive it automatically.
You should look out for a letter between October 2024 and early January 2025 telling you:
- You’re eligible and you’ll get the discount automatically; or
- You might be eligible, and you need to give more information.
- The letter will tell you to call the helpline by 29 February 2024 to confirm your details.
If you don’t get the letter by early January 2024 and you think you’re eligible, you need to call the helpline on 0800 030 9322.
If you’re eligible, your electricity supplier will apply the discount to your bill by 31 March 2025.
Some Scottish households do have to apply for the discount.
In Scotland there’s a “core group” that’ll receive an automatic payment and a “broader group” which has to apply for the scheme with their energy provider.
You’ll need to check with your energy supplier directly to see the eligibility requirements and details on how to apply.
The scheme will have more applicants than places, so make sure you apply as soon as possible.
EDF Energy customers can apply by visiting edfenergy.com/help-support/whd-application-form.
How will I receive the discount from EDF Energy?
If you pay by direct debit or on receipt of your bill the £150 Warm Home Discount will be added to your electricity account as a credit.
Once it has been applied, it will show on your next bill.
If you have a traditional prepayment meter, EDF Energy will send you a letter explaining how you’ll get your discount.
You’ll receive a Post Office voucher in the post and instructions on redeeming it.
If you have a smart prepayment meter, EDF Energy will automatically credit your meter with the discount.
What energy bill help is available?
THERE’S a number of different ways to get help paying your energy bills if you’re struggling to get by.
If you fall into debt, you can always approach your supplier to see if they can put you on a repayment plan before putting you on a prepayment meter.
This involves paying off what you owe in instalments over a set period.
If your supplier offers you a repayment plan you don’t think you can afford, speak to them again to see if you can negotiate a better deal.
Several energy firms have grant schemes available to customers struggling to cover their bills.
But eligibility criteria varies depending on the supplier and the amount you can get depends on your financial circumstances.
For example, British Gas or Scottish Gas customers struggling to pay their energy bills can get grants worth up to £2,000.
British Gas also offers help via its British Gas Energy Trust and Individuals Family Fund.
You don’t need to be a British Gas customer to apply for the second fund.
EDF, E.ON, Octopus Energy and Scottish Power all offer grants to struggling customers too.
Thousands of vulnerable households are missing out on extra help and protections by not signing up to the Priority Services Register (PSR).
The service helps support vulnerable households, such as those who are elderly or ill, and some of the perks include being given advance warning of blackouts, free gas safety checks and extra support if you’re struggling.
Get in touch with your energy firm to see if you can apply.
Money
Chocolate fans go for wild for new ‘strange combo’ Cadbury chocolate bar – here’s how to get it
CHOCOLATE lovers have been left thrilled after discovering a “strange combo” hidden within a new Cadbury’s bar.
The expert chocolate makers have tried their hand at creating a bold new flavour that has got shoppers going wild online trying to hunt down the sweet treat.
Customers have finally started getting their hands on Cadbury‘s new Dairy Milk Pink Lemonade edition which has recently hit some shelves across the globe.
Described as being the classic Dairy Milk chocolate on the outside with a “flowing raspberry lemonade flavoured centre”, the snack is sure to attract chocolate fans.
A picture of the oozing pink creme coming from the choc soon went viral online with hundreds curious as to what it tastes like.
One intrigued shopper said: “Oooh i wanna try this.”
A second said: “Need to try that.”
As a third simply said: “Yummy.”
Despite the seemingly global appeal for fresh new flavours of chocolate the pink delight is actually only available in one country so far.
Australia is the lucky nation who currently sell the Dairy Milk variation with it being seen in various stores including the iconic Woolworths.
They have the 46g bar’s flying off the shelves at the moment.
For those Brits who are interested in trying out exactly what a mixture of fizzy raspberry and smooth milk chocolate is like then the best bet is to order a bar online.
Ebay are currently advertising a bulk order of the bars online with other companies such as WorldSnacks also having them in stock for a range of different prices.
How to save money on chocolate
WE all love a bit of chocolate from now and then, but you don’t have to break the bank buying your favourite bar.
Consumer reporter Sam Walker reveals how to cut costs…
Go own brand – if you’re not too fussed on flavour and just want to supplant your chocolate cravings, you’ll save by going for supermarket’s own brand bars.
Shop around – if you’ve spotted your favourite variety at the supermarket, make sure you check if it’s cheaper elsewhere.
Websites like Trolley.co.uk let you compare prices on products across all the major chains to see if you’re getting the best deal.
Look out for yellow stickers – supermarket staff put yellow, and sometimes orange and red, stickers on to products to show they’ve been reduced.
They usually do this if the product is coming to the end of its best before date or the packaging is slightly damaged.
Buy bigger bars – most of the time, but not always, chocolate is cheaper per 100g the larger the bar.
So if you’ve got the appetite, and you were going to buy a hefty amount of chocolate anyway, you might as well go bigger.
More chocolate bargains
It comes as shoppers are racing to stock up on their chocolate treats for Christmas – don’t miss out.
Choccie fans were thrilled to see tubs of the nation’s favourites at amazing slashed prices in Tesco ahead of the festive period.
The mega deal starts online and in stores tomorrow, Wednesday, September 25.
Customers will need a Clubcard to bag the discount – which will see Cadbury Heroes, Celebrations, Cadbury Roses and Quality Street reduced from £6.00 to £3.95.
This means shoppers will be pocketing a 34 per cent discount on the sweet treats and saving £2.05.
Meanwhile, Asda shoppers were delighted after discovering a Cadbury chocolate advent calendar is selling for just 85p in stores.
The deal has been shared on the Extreme Couponing and Bargaining Facebook group and users are shocked by the reduced price.
It is a Cadbury Dairy milk advent calendar, containing 24 milk chocolates in various festive shapes.
On the Cadbury website, the calendar sells for £2.25, meaning this Asda bargain is 62% discounted from the original price.
Plus, B&M shoppers are rushing to buy festive chocolate treats that are perfect for kids’ Christmas Eve boxes.
The bargain retailer’s festive selection box has social media users going wild as they plan ahead for Christmas.
Money
Five ways to satisfy that dancing itch on a budget
STRICTLY Come Dancing has returned to our screens for its 20th anniversary.
If you have the bug for all things swing, samba and salsa, why not try the moves yourself.
Here’s how to keep dancing on a budget . . .
SILVER SWANS: The Royal Academy of Dance (RAD) offers free online ballet classes targeted at older learners from around the age of 55, though there is no strict age limit.
There are also in-person Silver Swan lessons across the UK, some of which are free or low-cost.
Take part and find out more at royalacademyofdance.org.
READ MORE MONEY SAVING TIPS
FREE ZUMBA: Get moving with high-energy Zumba Latin dance classes.
If you are a member of a gym, check if it is part of regular schedules you can access.
Or sign up for a seven-day free trial of the Zumba Dance Fitness Workout app.
Set a reminder to cancel after the promo period or you will be charged.
CHEER FROM THE SIDES: Strictly is mostly filmed with a live audience at Elstree Film Studios in Hertfordshire.
The public can soak up the atmosphere with free tickets allocated at random.
The majority for 2024 have gone, but tickets for the Christmas Special could soon be released.
Sign up to the mailing list at bbc.co.uk/showsandtours.
TICKETS FOR A TENNER: Sadler’s Wells runs dance productions from flamenco to hip-hop and everything in between at venues across London.
If you are between 16 and 30, you can get a free Barclays Dance Pass, which unlocks cut-price £10 tickets across Sadler’s Wells venues.
Sign up at sadlerswells.com.
TEA DANCES: Some local authorities run free or low-cost tea dances for older residents.
Contact your local council to find out more.
Or many of the over 120 local Age UKs across the country hold dance classes that vary from line dancing to ballet.
All are low cost, if not free.
Ask at your local branch or call 0800 678 1602.
- All prices on page correct at time of going to press. Deals and offers subject to availability
Deal of the day
BAT those lashes with a Benefit mascara trio, which is now on offer for £16.20 at lookfantastic.com, down from £27.
SAVE: £10.80
Cheap treat
MIX up a tasty refreshment with Robinsons ginger and orange fruit cordial, £3, at Sainsbury’s.
What’s new?
ASDA has partnered with influencer Erica Davies to create a capsule clothing collection for autumn.
Prices start from £9 and include this leopard-print cardigan, in stores now.
Top swap
GET salon-style locks with Dyson’s limited-edition pink supersonic hair dryer, £329.99, from John Lewis.
Or bag a serious saving with Mark Hill’s Pick ’n’ Mix Flexi Air styler £169.99, from Boots.
SAVE: £160
Little helper
RELIVE classic blockbusters including Twister and Despicable Me 4 in immersive 4DX at Cineworld for just £5 a ticket until October 3.
Find your nearest venue at cineworld.co.uk.
Shop & save
FILL your home with a delicious seasonal scent from this pumpkin ceramic candle, down from £8 to £5.60 at Dunelm.
SAVE: £2.40
Hot right now
BAG yourself two twister wraps and two signature fries from KFC for £10 when ordering for delivery through its app.
PLAY NOW TO WIN £200
JOIN thousands of readers taking part in The Sun Raffle.
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Every Sun Savers code entered equals one Raffle ticket.
The more codes you enter, the more tickets you’ll earn and the more chance you will have of winning!
Money
How to ‘unretire’ and use your knowledge and skills to help train younger staff
MOST firms measure their “return on investments”, known as ROI, but does your company measure “return on experience?”
ROE is a new phrase coined to explain the value added by older workers, by sharing their skills and helping train younger staff.
With the axing of winter fuel payments and the pension age rising to 67 from 2026, more pensioners are having to go back to work to top up their incomes.
But this “unretirement” has also led to mature staff offering their advice and wisdom to millennial and Gen Z employees.
The latest figures from the Office of National Statistics show the number of over-65s in employment has almost tripled since 2000, with 1.4million — equivalent to one in nine older people — now working. Just like Bob Lawrence, 72 at B&Q.
As a result, increasing numbers of firms are now actively seeking to build “inter-generational workforces” to capitalise on ROE, with hotel chain Hilton recently launching a recruitment drive to target over-50s.
Lyndsey Simpson, founder of 55/Redefined said: “Many people lack purpose in retirement and are keen to be productive, work and learn new skills. This is driving a huge wave of older adults coming back to their previous profession on a more flexible or part-time basis, or applying for roles to do something completely new.”
Many older workers are still seeking to expand their skillset, either taking on a new second career in a different industry or doing an apprenticeship, most of which are open to any age.
Firms including B&Q, Govia Thameslink and British Gas have all hired apprentices in their 60s and 70s.
While workers aged 65 and above mostly work part-time, a growing number are going full-time employment beyond the state pension age.
Dr Karen Hancock of the Centre for Ageing Better, said: “Workers with up to 50 years of workplace experience have an incredible wealth of knowledge to share.” Find out more at 55redefined.co and restless.co.uk.
‘YOUR NEW CAREER IS WAITING’
BOB LAWRENCE started work at B&Q to boost his pension and liked it so much he enrolled on the firm’s apprenticeship scheme.
He graduated this month, aged 72.
Bob, who works at B&Q Buxton, Derbys, as a showroom customer adviser, said: “Some people think learning stops as you get older, but we all have something to bring.
“In my previous career I was a manager in construction plant services. I’m a DIY addict and have over 45 years of business management experience – but the retail industry was alien to me.
“I had skills I could apply but wanted to embark on the Level 2 apprenticeship to feel more confident in my second career.
“Don’t let age stop you. Grab apprentice-ships as they can provide you with reliable income while you learn and develop your career, or like myself move forward with a second one.
“Believe in yourself. You can do it if you pursue it.”
IMPRESS A.I. WITH YOUR CV
MOST firms now use AI to screen job applicants, so how can you stand out?
Aarti Uplenchwar, at software firm Workday, knows. She says: “Your CV is still the most important tool.”
Here are her CV tips . . .
- Tailor it to the job: This may be time-consuming but is essential.
- More is not always better: Consider what experience you do and do not include, and which skills and certifications. Address what the employer wants, as they may use AI to look for specific skills.
- Make your skills shine: Organisations are shifting from a focus on job experience to looking at skills, so put these at the top of your CV. Create a section below your profile, then also highlight what skills you gained in your experience section – maybe problem-solving or creativity. The employer may have used AI to find the skills they need.
- Be specific about achievements: Keep them brief but detailed enough to showcase the problem you solved and how. You could say how much you increased revenue, or cut costs.
- Show personality: Hobbies and interests are key here. Sport, for example, suggests you may be good at teamwork, as well as healthy.
- Make your CV easy to read: Ensure it is clearly laid out. Whether a human will be looking over it, or AI, it must be easy to scan.
Jobspot
SOCIAL mobility programme Brixton Finishing School, which helps people into marketing, advertising and communication jobs, needs volunteers for its ADventure scheme. Check out careeradventures.org
KNOW YOUR HEART
ONE patient every five minutes is hospitalised with a heart attack – and employer support is vital to recovery.
This Sunday is World Heart Day and Travelodge manager Mark Wenlock has told how the hotel chain helped him after a recent triple heart bypass op.
He said: “I was itching to get back to work but they wouldn’t hear of me returning early. My manager visited me in hospital and the team got someone in to cover my role. They were world-class.”
Now he is campaigning to raise awareness. He said: “If any-thing feels out of the ordinary around the chest, get checked.”
Travelodge staff have raised over £970,000 for the British Heart Foundation, and rolled out the charity’s CPR training tool RevivR.
OH, STORE BLIMEY
WANT to work in the world’s coolest new shop?
Future Stores opens next month on London’s Oxford Street.
Featuring LED-covered walls and ceilings, and data scanners to work out customer preferences, it will host an ever-changing mix of brands – giving staff the chance to upskill across different retail sectors.
Founder Ariel Haroush said: “We looked around the globe to find the location for our first store. With rich heritage, Oxford Street and London were top of the list. We are delighted to create 40 jobs and look forward to changing the face of retail through a concept that asks why the high street can’t be as dynamic as your Instagram – ever-changing and engaging.”
See info@futurestores.com.
Money
Another major high street bank is offering new customers £150 free cash – see if you can get the bank boost
ANOTHER major high street bank is offering a big £150 cash incentive – here’s how you can cash in.
The bank is launching a new switch-and-stay offer, as the switch wars between banks trying to poach customers from rivals continues.
The Co-operative Bank has announced eligible customers could receive up to £150.
The first £75 is given when a customer completes a switch to the bank.
Then, the bank is offering three monthly instalments of £25 – another £75 – to make up the £150.
Both new and existing customers can apply to switch to a current account to make themselves eligible for the payment.
Like any good offer, there are a few boxes to tick off before the big payment comes in.
Customers must apply for a Standard Current Account or Everyday Extra account.
To be eligible, customers must not have benefited from a switch incentive at The Co-operative Bank since 1 November 2022.
And to receive the first £75, customers need to follow a series of rules.
They are:
- Deposit a minimum of £1,000 into their new account (this includes balances transferred as part of the switch).
- Have 2 active Direct Debits.
- Make a minimum of 10 debit card or digital wallet transactions (pending payments will not count toward fulfilment of this criteria).
- Register for our online and/or mobile banking service.
- Set up the debit card in a digital wallet (Apple Pay, Samsung Wallet or Google Pay).
That leaves the three £25 instalments – and there are some rules to claim them too.
Bankers need to deposit at least £1,000 into their account, have two direct debits and make a minimum of 10 debit card transactions.
Co-operative Bank director of products John Ward: “We’re really pleased to launch this offer today and hope it will encourage more people to consider switching to The Co-operative Bank – the only UK high street bank with a customer-led Ethical Policy, which guides how we do business.
“This offer allows eligible new and existing customers to benefit from up to £150 for switching and staying with The Co-operative Bank as their main current account provider.”
Nationwide, Lloyds, Santander and others have all been offering incentives over summer, with the switch wars looking set to continue into autumn.
It’s always advisable to check whether an offer is right for your personal circumstances.
Money
Southern Water in talks to import water from Norway — in the event of a severe drought
SOUTHERN WATER is in talks to import water from fjords in Norway — in the event of a severe drought.
The shock plan to bring in supplies from more than 1,000 miles away comes just a month after the firm’s boss Lawrence Gosden complained there was “too much rain”.
The company, which serves 4.7 million households in Sussex, Kent, and the Isle of Wight, is in conversations with a Norwegian firm to ship in 45million litres of water a day into Hampshire.
It stressed it was a “last resort option” amid concerns there would be shortfall while construction on a new reservoir takes place.
The cost would end up being added to customer bills.
It is likely to outrage households further as the average Southern Water bill is already expected to rise from £420 by 43 per cent to £603 by 2030, according to recent Ofwat documents.
The firm is majority owned by MacQuarie. The Australian investor previously came underfire for saddling Thames Water, which it owned between 2006 and 2017, with billions of pounds of debt so it could afford bumper dividends.
Southern Water imposed a hosepipe ban in August 2022, the first such for a decade, after a heatwave caused the driest July since 1935.
It was also ranked as one of the worst for sewage spills, pumping 317,285 hours of sewage from overflows in 2023, the Environment Agency found.
The Norwegian firm that it would use is Extreme Drought Resilience Service.
Its website says it offers to supply “those required to insure against critical shortages to their own water resources due to major outages or extreme drought”.
Tim McMahon, Southern’s managing director for water, said importation would be a “last minute contingency measure”.
He said it would only be used in the event of a drought in the early 2030s and “something considerably worse than the drought of 1976”.
Mike Keil, of the Consumer Council for Water, said that while customers want the security of having a reliable service, that should still come at a good value.
He said: “Water resources in the south of England are under intense pressure and water companies need to have a robust long-term plan, but that must not come at an unreasonable cost to customers or the environment.”
Meanwhile, the owner of South West Water yesterday said it had taken a £16million hit from parasite-contaminated water in parts of Devon.
Around 17,000 households in the town of Brixham had to boil their water for eight weeks because of the diarrhoea-causing bug that was in the supplies.
Pennon had to flush the network and provide bottles of water to affected customers.
It has also said it is paying £3.5million in compensation.
RIOTS HITS SALES
THE owner of All Bar One and Toby Carvery has blamed rioting in city centres for a summer sales slump.
Mitchells & Butler said sales growth slowed from 6.1 per cent in the second quarter to 2.5 per cent in the latest quarter.
Phil Urban, boss of the pub group, which also runs Harvester and Miller & Carter, partly blamed it on “an unseasonally cool summer and disruption caused by riots in city centres”.
The unrest was sparked by the stabbing of three girls in Southport, Merseyside, in July.
BUST AND WIN FOR BRA BOSS
AN ENTREPRENEUR who set up her own lingerie company from her living room has cashed in to the tune of £45.7million.
Sarah Tremellen, 58, launched Bravissimo in 1995 after finding a dearth of big-busted bra options when she was a size 34G during a pregnancy.
She previously said: “You don’t have to have big boobs to work here, but it helps.”
Almost three decades after setting up the firm she and her husband, Mike, have struck a deal to sell to Wacoal Europe, which also owns the bra brands Freya and Fantasie.
The Warwickshire-based firm, which started out with mail order, sells lingerie and swimwear up to L cups online and from 25 stores across the UK.
Mrs Tremellen said. “I have loved creating and growing Bravissimo. It has been an absolute privilege to be able to bring a range of bigger cup size lingerie and swimwear to so many wonderful women.”
AMAZON’S BRAG
AMAZON claims it is one of the top ten biggest payers of business rates in the UK.
It comes ahead of Government reforms set to level the playing field between online and high street shops. The online giant said it made a total tax contribution of £4.3billion, including PAYE contributions by 75,000 workers.
Its own tax bill came in at £932million. The disclosure comes a month before the Budget, with speculation the Treasury could raise the rate on logistics and warehouses, which online retailers use.
AI ADDS A BIT MORR
ARTIFICIAL intelligence cameras have helped keep shelves at Morrisons stocked and boost sales, the store’s chief said yesterday.
The grocer reported a 2.9 per cent rise in sales in the third quarter, which boss Rami Baitiéh said was helped by cameras monitoring stock and reordering when needed.
The supermarket confirmed it had struck a £331million ground rent deal on 76 shops to cut its debtpile from its £7billion takeover.
Money
Exact amount of time homeowners have to to lock in mortgage rates early as another major lender shortens window
BARCLAYS has become the latest major lender to make significant changes to its mortgages.
The high-street bank has shortened the amount of time customers have to lock in a new interest rate ahead of their current deal ending.
So, if you are a mortgage holder nearing the end of your fixed term, the clock is ticking to negotiate a new offer.
The length of time a borrower with Barclays has to secure a new fixed term deal has dropped from six months to three.
This is in line with similar moves by Halifax, Lloyds, Nationwide, and Santander in recent months.
The changes at Barclays will come in from September 25, and apply to customers who already hold a mortgage product with the bank and are looking to switch to another deal.
Choosing a new deal before your current ones ends means you can secure a good deal now in case interest rates rise later on.
If at the end of your current deal you find a better rate, you can choose that instead as there’s no penalty for ditching the one you chose before the end of the term.
Barclays said the move was down to greater stability in the mortgage market, and that over 70% of Barclays customers applying for product transfers did so within the last three months of mortgage terms meaning the extended window was no longer necessary.
A Barclays spokesperson, says: “In a more stable mortgage market and with rates coming down, the majority of our customers are choosing to apply for transfers within 90 days before their mortgage matures.
“In response, we will be moving back to a product transfer window of 90 days, as we continue to deliver the best value and product range to our customers.”
At the start of the month, Halifax and Lloyds reduced the time frame for those remortgaging from six to four months.
Nationwide and Santander made the same move in June.
Other lenders, such as HSBC, NatWest and Virgin Money still offer customers six months to lock in their new deal.
An estimated 700,000 loans are up for renewal in the second half of 2024, says industry body UK Finance.
A real concern for borrowers needing to remortgage is how much fixed rates have risen in the last few years.
The average two-year fixed rate deal has increased from 2.34% in December 2021, to 5.56% as of September 2024.
Meanwhile, the average five-year deal has risen from 2.64% to 5.20%, according to the latest data from Moneyfacts.
Different types of mortgages
We break down all you need to know about mortgages and what categories they fall into.
A fixed rate mortgage provides an interest rate that remains the same for an agreed period such as two, five or even 10 years.
Your monthly repayments would remain the same for the whole deal period.
There are a few different types of variable mortgages and, as the name suggests, the rates can change.
A tracker mortgage sets your rate a certain percentage above or below an external benchmark.
This is usually the Bank of England base rate or a bank may have its figure.
If the base rate rises, so will your mortgage but if it drops then your monthly repayments will be reduced.
A standard variable rate (SVR) is a default rate offered by banks. You usually revert to this at the end of a fixed deal term, unless you get a new one.
SVRs are generally higher than other types of mortgage, so if you’re on one then you’re likely to be paying more than you need to.
Variable rate mortgages often don’t have exit fees while a fixed rate could do.
The second half of the year has also been marked with repossessions, highlighting the financial struggles many are under right now.
UK Finance says that 980 homeowner mortgaged properties were repossessed in the second quarter of 2024.
This is an 8% increase compared to the previous quarter, and a 31% uplift on the same quarter in 2023.
But it’s not all doom and gloom. There is in fact a positive outlook on the housing market.
The Bank of England reduced the base rate for the first time since March 2020 in August, dropping the rate from 5.25% to 5%.
As a result, lenders have already started to follow suit and drop their fixed rates.
In fact, Nationwide is leading the way, currently offering a 3.74% home purchase plan deal.
Rachel Springall, finance expert at Moneyfacts Compare, said: “Each lender will have their own processes and timescales for getting applications through, so they can change the window of opportunity from time to time to cope with demand, but also as a reflection on changing interest rates.
“Interest rates have been falling, so condensing the window can help lenders avoid re-applications. The same window can extend, depending on the situation of the market.
“Borrowers would be wise to seek out independent advice from a broker to navigate the deals available, but ensure they allow a couple of months to refinance before their current deal ends.”
The move also comes as Barclays announced a reduction in rates by as much as 0.34% for new buyers and those remortgaging.
Meanwhile a major building society is now lending first-time buyers up to six times their income for a mortgage.
HOW FAR AHEAD CAN I LOCK IN A NEW FIX?
- Barclays – three months
- Halifax – four months
- Lloyds – four months
- Santander – four months
- Nationwide – four months
- HSBC – six months
- NatWest – six months
- Virgin Money – six months
How to get the best mortgage deal
If your mortgage deal is nearing the end of its term, you should start to compare rates now and speak to a mortgage broker to assess your options.
It is then worth speaking with your current lender to see what deal they might be able to offer you.
Getting the best rates depends entirely on what’s available at any given time.
There are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.
Expert’s view on reducing time to lock in new rates
By David Hollingworth, associate director of communications at L&C Mortgages.
Many lenders extended the timeframe when existing customers could lock in a new rate because interest rates were climbing so quickly and market conditions were so volatile.
The market is now much more stable and mortgage rates have been falling as the outlook improves and inflation has eased.
As a result, there’s less need for customers to rush to take a rate six months before their deal ends, so lenders have started to return the window for their borrowers to pick a new deal to where it was.
It’s still possible to lock a rate in sooner with a new lender if you want to, as mortgage offers are still typically valid for up to six months.
It makes sense to shop around the entire market anyway, but starting the process three or four months ahead should give you ample time to prepare for a smooth switch.
To find the best deal use a mortgage comparison tool to see what’s available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
Remember you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statements.
Once you have taken a look at all your different options, you will want to consider the most important aspects.
These include your current rate, the terms and length and any exit fees, as well as your loan-to-value (LTV).
When your fixed rate ends you will automatically roll on to your lender’s standard variable rate (SVR), and these often are considerably higher than a standard fixed rate.
These can be as high as nearly 8% so switching before the end of your current term is a high priority.
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