Commenting on the proposals aimed at ensuring everyone has access to a bank account and the increase in ISA limits, Kevin Mountford, head of banking at moneysupermarket.com, said:
"The Chancellor has certainly delivered a sweetener in the form of an increase in the ISA limit - finally Britain's army of savers have been recognised, and not before time. Whilst we appreciate that we are in a difficult financial environment, savers have been left out in the cold for far too long. Increasing the ISA limit and allowing more people to save more in cash means more flexibility for people when choosing a home for their savings. However the increase will be very small year-on-year so the incentive to save this extra amount is limited.
"Broadly speaking, the commitment to 'banking for all' is a positive move - anything that ensures consumers can access even the most basic of financial products should be encouraged. Banks have a duty to provide current accounts under their CSR obligations, although clearly some take these more seriously than others. A cynic might say this could be construed as an attempt by Darling at a well-timed vote grab, but we are glad to see them commit to making financial products available to all. It's important to note that any additional costs accrued by the industry will undoubtedly be passed on to the consumer in some form though.
"However, the bigger point is surely around the need for financial education. Some people choose not to have a bank account and, perhaps unknowingly, restrict their access to the best deals on other financial products where often the better value comes from paying direct debit. This is certainly the case with utilities companies where almost all offer some kind of discount for paying by direct debit."
Commenting on the abolition of stamp duty for first time buyers on properties of under £250,000, Hannah Mercedes-Skenfield, mortgage channel manager at moneysupermarket.com said: "This will be a well needed helping hand to many first time buyers who have been struggling to step onto the property ladder for some time. Even a one per cent saving can make a significant difference to someone looking to buy their own home, particularly if that means they can now put down a cash deposit quicker or increase the value of their deposit.
"Our figures show that a third of all visitors to our mortgage channel are first time buyers, and overall over 85 per cent of first time buyer searches on the site are for properties below £250,000 so we can really see the benefit of scrapping stamp duty for this group. However with banks requiring a cash deposit of around 20 per cent for a decently-priced mortgage there are still huge barriers in place for all borrowers, and those without a big deposit will still face having to pay higher APRs.
"The abolition of stamp duty for first-time buyers could possibly lead to a distortion to the market - potential vendors could look to dodge the new limits by inflating prices well over the £250,000 mark or reducing it to under £250,000.
"The increase in stamp duty benchmark should also be extended to all purchasers - if next time buyers are not able to move due to stamp duty costs, then there won't be any available properties for first time buyers to snap up."
Download This Press Release
Download as RTF