Defaqto’s Star Ratings for 2008 have been more widely adopted by providers than ever before. The ratings, which have become the most authoritative and impartial guide to product quality available, cover products in the banking, protection, investment, pension and general insurance areasIn January Defaqto undertook the huge task of analysing the quality of just under 2,200 products in 24 separate product areas from 550 different suppliers. Defaqto used a set of quality criteria to assess each product in each particular area. From this analysis Defaqto was able to score each product and then assign it a Star Rating. The ratings ranged from five stars down to one star.
In total Defaqto assigned 252 Five Star ratings, 360 Four Stars, 571 Three Stars, 498 Two Stars and 511 One Star.
Defaqto licenses companies to use the rating in their promotional material and so far this year, Defaqto has licensed the use of 140 Five Star Ratings.
Brian Brown, Head of Insight at Defaqto said: “A Five Star rating enables companies to demonstrate to consumers that their products have reached the highest tier of quality. The rating, with its associated logo, is becoming a well-known statement of product quality in the market as more and more companies adopt it into their marketing plans.
“With the ever-growing emphasis on product cost, product quality has been in danger of being excluded from the purchase decision. A Five Star Rating helps to address this imbalance by identifying for consumers products which have been independently assessed for quality.”
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Main Star Rated Product Groups
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| Credit Cards |
Current Accounts |
Home Insurance |
Motor Insurance |
| Pet Insurance |
Travel Insurance |
Payment Protection |
SIPPs |
| Offshore Bonds |
Onshore Bonds |
Critical Illness |
Income Protection |
-Ends
For further information contact:
Defaqto Limited
Brian Brown, Chris Johnston or Luci Mylward
01844 295 454
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One could be forgiven for thinking that there may be something of a flight to cash given the current volatility in the world’s equity markets. For those with mortgages there’s one product genre that could prove to be a useful ally in such circumstances: the offset or current account mortgage.
The structure of an offset mortgage is relatively straightforward in that your savings balance is offset against your mortgage balance with interest charged on the net amount. So if you have a mortgage of £100,000 and savings (held with the offset provider) of £15,000 you would be paying interest only on the £85,000 net balance.
With an offset mortgage the various accounts (typically savings, current account and mortgage) are maintained as separate accounts with the balances offset against each other to determine the amount on which interest will be levied. Current account mortgages (CAM) however have all the constituent parts held in the same account and resemble one really large overdraft. Both types effectively achieve the same result.
There is a downside to offsets and CAMs: the interest rates charged tend to be at a slight premium to traditional mortgages but their innate flexibility may be enough to justify this premium for many customers. This is because you would effectively earn interest on your savings at the same rate that the mortgage is charged and, crucially, not get taxed on the savings element because it is offset against the mortgage balance.
Customers who should contemplate the offset route typically include those with reasonably high levels of savings in a deposit account, higher rate taxpayers, the self-employed (who may have irregular income and expenditure patterns) and buy-to-let investors. The ability to make underpayments or overpayments and to access your savings balances completes the picture.
If the offset permits you to have a current account as part of the package that’s an additional plus point. The ability to park some cash when reluctant to be fully involved in the stock market and make the cash work for you, while retaining the ability to access it for other purposes, make another potentially powerful argument for the offset mortgage.
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