7.4 Changes to Providers, and to Products and Services Flashcards
How do individual savings accounts encourage people to save?
By offering a tax-free return
How much of savings interest earned on non-ISA products is tax-free for basic-rate taxpayers?
The first £1,000
How does the Help to Buy scheme offer help?
- Equity loans
- Mortgage guarantee scheme (closed in 2016)
How do equity loans work in the Help to Buy scheme?
- The government lends the borrower 20% of the purchase price of a new-build home, with no fees payable for the first five years of ownership
- Borrowers put down a 5% cash deposit and borrow the remaining 75% from a lender
What is the limit on Help to Buy equity loans?
Properties with a maximum price of £600,000 in England
how do mortgage guarantee schemes in the Help to Buy scheme work?
The mortgage lender purchases a guarantee on the mortgage loans that it makes and offers mortgages that are 95% of the purchase price so consumer only needs a 5% cash deposit.
How do Help to Buy ISA’s differ from standard ISA’s?
For every £200 people save towards their first home in this ISA, the government will put in an extra £50, up to a maximum bonus of £3,000
What have changes to the providers operating in the UK and the products and services they offer been driven by?
- Regulation
- Market investigations
- Economic conditions
Who was the Current Account Switch Service set up by and why?
The Payments Council to ensure that people can switch bank accounts quickly and easily
How long will account switching take under the Current Account Switch Service?
No more than 7 days
The CASS is backed by the CASS Guarantee which means what?
It will refund consumers any interest that they lose or pay and any charges that they may incur should the process go wrong
There is a redirection service that lasts how long after the switch date in the CASS?
13 months
What does the redirection service in the CASS mean?
Any payments made into or out of the old account by mistake will be transferred to the new account
What are challenger banks?
Smaller banks that challenge the dominance of the big five banks.
What are the advantages/impact of challenger banks for consumers?
- Customers can pick a niche product and USP
- More personalised service
- Increased customer satisfaction
