In the news

The Clerical Medical brand is to be dropped in favour of Scottish Widows. One of the lesser known facts arising from the Lloyds TSB/HBOS merger was that need for the coming together of the countries leading investment houses Scottish Widows (part of Lloyds TSB) and Clerical Medical (part of HBOS).

A single product range will be created with Scottish Widows pension plans sitting alongside the investments and offshore products of Clerical Medical. There will be no change for existing policyholders but new business will fall under the Widows brand from July. More on this story can be found here: http://www.citywire.co.uk/adviser/-/news/other/content.aspx?ID=339144&Page=1

With Swine Flu ever present in the news here is a video presented by Sky news setting out in their opinion the economic consequences of a swine fever pandemic. Scary stuff and not to be sneezed at: http://www.citywire.co.uk/personal/-/video/market-and-shares/content.aspx?ID=338809

The mortgage market is heating up with some vary strange going on's. Taxpayers will be horrified to discover that Halifax Bank, now in government control, is offering mortgages to first-time buyers in the Irish Republic at half the rate at which they are available in the UK.

Halifax, part of the Lloyds Banking Group, is charging 2.74% for a two-year fixed-rate deal to first-time buyers in Dublin. A two year fixed rate first time buyer loan for an English borrower would cost 4.19% at a 60% loan to value up to 6.4% for an 85% LTV.

Meanwhile over at the Nationwide they have moved to improve its profit margins by introducing a new ‘standard mortgage rate’ at a higher rate than its existing ‘base mortgage rate’ – otherwise known as the Standard Variable Rate by other lenders.

Customers taking out a mortgage after April 30th with Nationwide will no longer revert to its base mortgage rate when their deal expires, but will instead go on to the society’s new 3.99% standard mortgage rate. This compares with its current base mortgage rate of 2.5% - an increase of 1.49% for all new borrowers.

The society says it will maintain its base mortgage rate, currently 2.5% for existing customers, but any new customers whose mortgages come to an end will revert to its new rate – which it can vary at will. It does not track Bank Base Rate. This is a retrograde step as Nationwide has always promised that customers on its base mortgage rate would pay no more than 2% above BBR.

On the savings front with money coming off fixed term deposits needing to be reinvested, an increasing number of savers are looking at easy access accounts as a short-term home for their money while they decide whether the high yields available now on some good quality shares are a better long term bet. They are likely to want to wait a while to see if the old adage ‘sell in May and go away’ holds true this year.

Savers have to be very picky as the highest rates paid on instant access accounts all have bonuses which are generally not paid unless you leave your money in the account for at least a year – which won’t suit everybody. Ing Direct, for example, is paying 2.75% for money on instant access. But 2.2% of it is a bonus only payable after one year - although it does have the advantage that the bonus is fixed.

Probably the best no-frills instant access account is Nationwide’s ESaver Plus which is paying 2% gross for sums of £1 or more with no penalties for withdrawal. Sainsbury’s Internet Saver is paying the same 2% but minimum investment is £5,000.