Investing Insiders Weekly #16

TOP STORY: LENDERS MYSTERIOUSLY INCREASE RATES

Mortgage lenders are increasing their rates – despite the fact the Bank of England hasn’t increased its base rate.

Santander and NatWest are among a number of lenders that are increasing rates this week – NatWest increased the rates on some of its deals by up to 0.2 percentage points, while Santander raised them by 0.07 percentage points.

The question is… why? 

Well, mortgage experts say the changes are because of something called ‘swap rates’, which also have a big impact on mortgage rates. They’re complicated – it’s basically the interest that mortgage companies agree to exchange with one another to manage risk. Don’t ask.

It comes after bond yields almost hit their highest level since 1998 on Tuesday – these can push up swap rates, which in turn push up mortgage rates.

After inflation crept up this month again to 3.8%, experts are also not expecting the Bank of England to cut its base rate any further in the immediate future, which lenders are also factoring in.

💡 What should you do about it? 

While rates have been creeping up, the good news is that experts don’t expect the increases to keep going for long.

For anyone considering taking out a mortgage or remortgaging, it’s still worth locking in a deal now – while rates aren’t expected to go up much, they also aren’t expected to drop significantly in the near future after this month’s inflation rate. 

You can lock a deal up to four months before you start your term, and if prices go down, you can ask your lender to swap to a cheaper deal, so there isn’t any harm in bagging a good rate now.

TIP OF THE WEEK: HOW TO GO OVER THE £20K ISA ALLOWANCE

Did you know that there’s a legal way to go over the ISA limit of £20,000?

It’s called ‘additional permitted subscription, or APS. The way it works is that if your spouse/civil partner dies, you can inherit their ISA allowance.

Normally, you can put £20,000 into an ISA per year. But, if your spouse passes away, your ISA allowance includes whatever amount they had in their ISA at the time they died.

But, the twist is that you don’t actually have to inherit the money yourself – you just have to apply for the APS within three years of them passing away.

The rule could save you tens of thousands of pounds in tax.

ENERGY UPDATE: BILLS ARE RISING

Energy bills will rise by 2% for millions of households in October, according to the latest announcement by the energy regulator Ofgem.

From 1 October to 31 December 2025, households using a typical amount of energy could pay up to £1,755 per year. That’s up £35 from the July price cap of £1,720.

💡Tip: The ‘energy price cap’ is the maximum amount that energy firms can charge households per unit of energy. The headline figure that is used by Ofgem assumes an average amount of energy usage – that isn’t an actual monetary cap. The more energy you use, the higher your bills will be.

Here are our top tips for saving money on your energy bills:

Create a budget: making a budget can help you identify other areas in your life to try and make a saving. A budgeting app can help you automate the process and get started on cutting costs.

Check your tariff: if you’re on a standard variable tariff or your fixed-rate tariff is due to end before October 1, switching onto a fixed-rate tariff can help you cut costs.

Shop around: price comparison websites are a great place to start. They’ll help you compare lots of energy deals quickly and help you find the best value. Remember to look out for exit fees, which could make your tariff more expensive if you want to switch again before your deal ends.

Get energy efficient: try to reduce waste by switching off lights, appliances and technology when they’re not in use. Taking steps to insulate your home can also help reduce your energy costs.

Apply for support: check if you’re eligible for support from your energy supplier or the government to help you afford the cost of heating and powering your home.

You can also watch our video explaining this in more detail here.

FROM THE REGULATOR: SCAM WARNING

Last week, we talked about pension scams after The Pensions Regulator revealed it had clawed back cash for 2,000 defrauded pension savers.

This week, the Financial Conduct Authority (FCA), which regulates financial companies, said it had received 4,465 reports of scammers impersonating it in the first half of the year, with hundreds sending money to fraudsters.

It said the fraudsters try to steal money by getting people to hand over money or sensitive information, such as bank account details.

Remember: One of the key warning signs of a scam is if you are approached about the opportunity out of the blue, either by phone, text or email. 

A legitimate financial company – or in this case, the regulator – will also never ask you to hand over sensitive information like passwords over the phone. 

Another sign of a scam is if you are pressured into making a quick decision. Genuine companies should not try to force you to make a decision over the phone or under time pressure. 

In summary: If you are contacted from someone claiming to be the financial regulator, hang up and contact the FCA directly – don’t be pressured into handing any money over.

JARGON BUSTER: FINANCE TERMS EXPLAINED

Base rate – The Bank of England’s interest rate, which sets the interest rates charged by financial firms like banks.

Swap rates – Interest rates that financial firms trade with one another.

Bond yields – The interest rate charged/earned on bonds, which are a type of fixed-rate investment product.

Inflation – A measure of how quickly prices are rising.

ISA – a type of tax-free savings product (any interest you earn on your savings is tax-free).

Ofgem – The regulator of the energy sector. Oversees how energy providers act and sets rules.

Energy tariff – The energy deal you are on which determines how you pay your energy bills and how much you pay. Eg. variable means your bills fluctuate depending on the price cap set by Ofgem, while fixed means you pay a fixed amount per unit of energy for the duration of your deal.