Abbey National has launched a new First Home Saver account, the only high street savings account specifically designed for first-time buyers.
The account is aimed at potential first-time property buyers who need to save for a deposit and will benefit from the regular savings aspect of the account.
With the average house deposit now in excess of £18,000, would-be homeowners have to save more than ever to get on the property ladder. Compared with an average deposit of just £5,000 in 1996, first-time buyers now need to save over three times as much, with average deposits for London properties an incredible £31,100.
First Home Saver can be opened with a minimum of £100 and requires a standing order of at least £100 per month. Savers are encouraged to let their savings grow, as the account pays 3.50% gross p.a. interest each month when no withdrawals are made. For months when there is a withdrawal, or for any reason at least £100 is not paid in, the interest rate is 0.1%. This applies only for the month of withdrawal, unlike competitors' similar accounts, which cut interest rates for the full year. Retail vouchers worth £150 are offered if customers choose an Abbey National mortgage.
Abbey National head of savings marketing Alexia Kilby, says: “Our research shows that people are more motivated when saving towards a goal and they like the idea of a specific savings account just for their house deposit. Customers also say they find it hard to be disciplined about saving long-term, that it is easy to procrastinate, and even more tempting to spend.”