"THE ONE ACCOUNT" any advice/experiences?????

Sassers

rebl43 wrote:

See this thread.........
http://forums.moneysavingexpert.com/showthread.html?t=271716

oooh well I hadn't joined but that week I found a £1 in a carpark, bought a scratchcard and won £10. That paid for my weekly food shop(all £7 of it such as 6 bags of asparagus for 10p...etc) The remaining £3 has gone into my mortgage zebra.....(couldn't find a pig so make a `feed me cash' zebra)


Sorry to have hijacked the OP !

Pinklepurr

I had a ONE account for a couple of years and my husband and I were not disciplined enough to make it work for us so we switched back to a regular repayment mortgage and separate current account. It did come in handy when my husband was out of work for 2 months though. We explained our situation to them and they were fine about no income coming in. It also "swallowed" all our savings so when we closed the account down we had to start saving again from scratch. I think it depends on your attitude to money and for me, I didn't want all my eggs in one basket.

skim

One thing I have found is IFA's don't seem to like to sell offset accounts.

They seem to push discounted mortgages so they can come back in a few years & get another wad of money for finding you another discount mortgage.

I think you need at least 30-40% savings compared to the mortgage before an offset account will actually benefit you

kershaw39

Pinklepurr wrote:

It also "swallowed" all our savings so when we closed the account down we had to start saving again from scratch. I think it depends on your attitude to money and for me, I didn't want all my eggs in one basket.

thanks for the advice/experience so far .....

Im still unsure about this account and the swallowing your savings sounds BAD...

I've tried to understand the offsetting on the one account web site but it seems complex.... and if i call them for advice its bound to be all good..... how does the savings/salary really in simple terms offset each month to mortgage ??????

rls1973

i would agree with pinklepurr and others, we have a one account and the idea is brilliant but you have to be so disciplined with money (and thats both of us not just one of us!) it's so easy to overspend. and yes, you have got all your eggs in one basket, however if you've got a lot of eggs then that's working in your favour. i think it would be great for people with more savings than debts(including mortgage).

skim

As I understand it - you can split your OneAccount into separate amounts of money.
e.g you have a separate folders that you can name for things such as holidays, savings, saving for tax bill etc.

So you can move your money around a little but on the statement the OneAccount groups these all into ONE pot & therefore you save interest due to this

It only swallows your savings when you let it.
e.g. say for instance you have a 25 year mortgage, you pay it off in 10 years (reach a zero balance). Effictively your mortgage is paid & you can walk away with nothing other than your property, but if you keep your mortgage going you;'ll have nothing to pay but if needed you can still pull money out of the pot but obviously you'll have to start paying interest & repayments again.
I had a very difficult time explaining this to the wife - it takes a little while to get your head around the whole concept but when you do & if you are disciplined with money then it's a very good way of paying your mortgage.

Once you are in the black you'll get 1% interest on your money in the account so at that time it's wise to move that money to a better rate account.

happyharry_2

if it'll help anyone we've had an 'Openplan' offset account thru woolwich for a number of years. it's worked great for us. opted for repayment to be paid off when we're 60. started by rounding up the mortgage payment from £260ish to £300. after cashing in some shares and consolidating several poorly performing savings accounts the overpayments and the offsets really start to show. we didn't like the look of the 'one' account at the time.

What we get as standard with 'openplan' is a mortgage account and a current account. you can then add 'saving pots' as required so that you can keep your savings away from your partners savings, your c/a and your mortgage. i assume that when reference is made to the 'one' account swallowing their savings they mean it's all in one 'pot'? agree this makes it harder to keep on the straight & narrow.

interest is calculated on a daily basis on the mortgage amount less the total of all of the 'pots'. we pay 0.75% over the base rate for the life of the mortgage (currently 5.5% which is better than a lot of mortgages), but they now offer 0.5% over (but with set-up fees attached).

The mortgage payment is transferred each month by woolwich from the c/a to the mortgage account. we use credit cards during the month for all spending and so maximise the offset effect of the c/a, paying off the c/c in full by dd. we can operate the c/a via the internet and transfer between pots if required. the other neat thing is that the mortage term you see (via the website) reflects the amount you are overpaying. so rather than paying the mortgage of when we're 60 it tells us the term has reduced by 5 years!! (assuming we continue to overpay at the current rate).

the openplan statement is great each month. it shows the net (mortgage less savings 'pots') amount due each day and the interest calculation on that amount, totalled for the month. the statement also shows the amount of interest saved by the offset since the mortgage started which is a great incentive to try and offset more! you also get a full c/a statement and a statement for each 'pot'.

sorry the post is so long but its the best thing we ever did with our home finances.

Paige

Hi
We had a one account for 6 years but have recently switched to a standard life freestyle mortgage. The one account will only work for you if you both are VERY deciplined with your money. If you are not do not have one. You could end up in a sticky situation paying no money off your mortgage. However if you are great savers and will not be tempted with using the money for other things this is the one for you.

Gorgeous_George

I applied for a OneAccount and was accepted providing I paid the mortgage off by the time one of us was 60. Having applied for a 12 year mortgage, this 60 rule meant we'd have to pay it off within 8 years and the repayments became scary.

I phoned Britannia and now have a Base Rate +0.74% tracker on a flexible mortgage. It has a separate savings account attached to it that comes with a cashcard. Any money in this account offsets the mortgage and effectively earns the same rate (currently 5.74% and equivalent to 7.175% for basic rate taxpayers).

Works for me.



GG

Martinslovechild

I can recommend the Co-Operative Bank Flexible Tracker Mortgage. It offers a rate of 5.3% (which is considerably less than the One Account's 5.95%) and you can overpay, underpay or take a payment holiday.

I've had my Co-Op account now for nearly 4 years and they've been excellent. I would add that these types of account are particularly attractive for higher-rate taxpayers as you choose to not earn interest on your savings and so pay less interest on your mortgage.