Commenting on the decision from the Bank of England to raise interest rates to 0.5%, Tashema Jackson, money expert at uSwitch.com, says: “Despite the warnings, this first rise in interest rates for ten years could well serve as a warning call to millions of mortgage holders to get their finances in order, as many will have never experienced a rate rise and the knock on effect it has on their finances.
“Depending on the type of mortgage that homeowners hold, the increase in the Bank of England’s base rate could have an effect on mortgage repayments. For customers on a tracker rate mortgage, or a standard variable rate, there is likely to be an immediate impact. However, even for the 2.1 million people who are coming to the end of their fixed rate deal in the next 15 months, this rate rise could have implications as lenders remove their lowest fixed rate deals.
“Now could be the time to act, as it won’t just be mortgage holders who feel the pinch. We have become used to low rates and borrowed accordingly – the latest figures show a nearly 10% rise in consumer credit lending. The rise in the base rate of interest could make it harder for some consumers to service this debt, as we’ve already seen the longest 0% interest free credit card offers being withdrawn. Take a good look at your finances and consider which are the right deals for your circumstances, this can help your money go that little bit further.
“This rate rise could have an impact on all borrowers, so if you are worried about what the rate rise will do to your finances, speak to your lender and ask them what is the likely outcome. For many, the impact won’t be instant, so you still have time to get your finances in order.
“If you are really struggling and don’t know where to turn, a debt charity such as StepChange, will be able to talk you through your options.
Find out how you could save over £1,000 a year with uSwitch here.
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Notes to editors
All research referred to was conducted by Opinium, August 2017.
2,005 nationally representative UK adults (aged 18+).
According to figures released by online mortgage broker Trussle in June 2017 (see here).
- Calculation based on UK Finance data that roughly half of the 4.2 million regulated mortgage borrowers on fixed rates will come to the end of their deal this year or next. This equals 2.1 million households.
- Increase in consumer credit lending increased by 9.9% in the 12 months to September 2017. Bank of England Bankstats (Monetary & Financial Statistics) September 2017, Table A5.2. http://www.bankofengland.co.uk/statistics/Pages/bankstats/2017/sep.aspx
uSwitch is an online and telephone price comparison and switching service, helping consumers get a better deal on gas, electricity, home phone, broadband, digital television, mobile phones and personal finance products including mortgages, credit cards, current accounts and insurance.
uSwitch customers have the option to create an account which will prompt them when their current broadband, credit card, energy, insurance and mobile deals are coming to an end. For energy customers, the account can also automatically monitor the market and notify them when they can move to a cheaper tariff - making future comparisons even simpler and faster. In 2016, uSwitch saved UK consumers over £320m on their energy bills alone.
Broadband customers can conduct a speed test to find out how fast their broadband is and to identify the best broadband provider for their postcode.
The uSwitch mobile app allows customers to compare energy and broadband deals. Energy customers can compare deals in seconds by scanning the QR code on their energy bill. The app won 'Most Innovative Use of Mobile' and the 'Chairman's Award' at The DRUM Marketing on Mobile Awards 2017. Consumers voted it Most Popular Website (Comparison category) in the Website of the Year Awards 2016.
uSwitch was the first comparison site to achieve the Plain English Campaign’s Internet Crystal Mark, recognising that it has clear language, is accessible and easy to use.
uSwitch has a UK contact centre which is manned by energy and broadband experts. The ‘Send Us Your Bill’ service allows customers to post their latest energy bills to FREEPOST USWITCH in order to receive a free call back to be guided through the comparison process. Alternatively, consumers can email email@example.com with their postcode and usage details. uSwitch’s address is The Cooperage, 5 Copper Row, London, SE1 2LH.
uSwitch is owned by ZPG Plc (LSE:ZPG), owner of some of the UK’s most trusted home-related digital platforms including Hometrack, Money.co.uk, PrimeLocation, Property Software Group and Zoopla.