Paul Lewis writes:

Dear listener,

Oh dear. How short memories are. Today – Friday – The Daily Telegraph ‘reveals’ that the new ISA limit of £10,200 (up for £7,200) is not quite so generous as, well, newspapers said it was when the Chancellor announced it in his Budget on 22 April.

The higher limit – of which half (£5,100) can be in the popular cash ISAs – begins for everyone from April, next year. But for those aged 50 or more, it starts six months early, on 6 October. And as you will have heard on Money Box the day after the Budget – and the Saturday after - there are problems with this October change.

First, you will not be able to take out a new ISA – the rules do not allow that. So you will only be able to top up an existing one. And guess what? Many of those – mainly the fixed rate ISAs – will not let you do that.

And if you try to switch your money into another ISA – which the rules allow you to do – you will be limited to the minority of ISAs that allow transfers in. And even if you overcome all those barriers, and even if your cash ISA pays the top rate of 3%, then in six months you will get just £22.50 interest on the extra £1500 cash allowed and the tax relief on that will be worth just £4.50 – or £9 if you are a higher-rate taxpayer.

All these problems and calculations were revealed on our programme Budget Call the day after the Budget, and reiterated on Money Box on 25 April. So, that’s why we are not doing that story. This week at least.

Last week, a gold factory. This week, I realised I was in a mortgage factory. I had gone to the City to try to answer the question - what is a ‘swap rate’? We ought to know because they set the price banks and building societies pay for the money they lend to us for a mortgage. Recently ‘swap rates’ have come down to historically low levels. But the fixed rate mortgages they fund have not. Indeed some are going up. Before asking ‘why?’ I wanted to understand properly – on your behalf – exactly what a ‘swap rate’ really was.

But, as I watched the complex screens and heard the deals being struck, it slowly dawned on me that I was in a mortgage factory. The ‘swap rate’ was the mortgage rate the lender buys and then sells to us at a profit. And it was here in this smart City office that the interest rate they bought was actually made by the deals that were being done. Twenty years ago these products, and the City factories that make them, didn’t exist. Now they do. And that is why we have so many more mortgage products now than we had then. There will be a feature – with pictures – on the web when the programme goes out tomorrow.

Well, that almost disposes of the first item this week in…

…THE BEST RADIO PROGRAMME.

To the City, as I said, to find out what a ‘swap rate’ is. There will be a test at the end of the item. And then to ask why, oh why, oh why, if they are going down, are fixed rate mortgages going UP? And what are the best deals around at the moment?

What is the worst bank? Well, one set of figures out this week says it is Lloyds Banking Group. There were more complaints to the Financial Ombudsman about its thirteen brands than about any other financial services company. But hold on, couldn’t that be because it has more customers with more products? Yes it could. But another set of figures shows the percentage of complaints to the Ombudsman which are upheld. And Lloyds and its subsidiaries take the top place there too*. So it is official. Lloyds – 43% owned by the taxpayer – is the worst bank. The British Bankers Association tells us why these figures only give one very biased view of banks and their customers. Most of whom, it says, are happy. Or at least don’t complain.

*Assuming the percentage upheld remains the same. Applying the percentage upheld in the period to the number of new complaints received in the period, Lloyds has 14,710 complaints upheld in the customer’s favour compared with 6,461 for the second highest, loans.co.uk.

The number of UK towns with their own currency doubled this week to four. The Stroud Pound and the Brixton Pound joined their older cousins in Lewes and Totnes. Our reporter pounds the streets to ask locals if the new notes strike a chord, or are out of tune.

If you’re over 50 and already own shares you may well have been called by a dealer trying to sell you ‘penny shares’. These low value shares in obscure and often very small companies are peddled as a good investment. Once a share is worth a penny, it can really only go up in value! In fact anything under a pound can count as a ‘penny’ share. And yes three of our major High Street banks would have fallen into that category some months ago! One of them still does. But this week the Financial Services Authority ordered eleven companies who sell penny shares to quit the market unless they changed their ways. Six decided to go. We find out why the FSA took this strong action. And what you can do if you were mis-sold penny shares.

Finally, will a new system of quality marking company pensions really encourage them to put more into their employees’ pension pots?

We may not squeeze all five stories in. We find four items allows us to have a bit more ‘texture’ in the programme. By which we mean more music, clips, sound, basically anything other than me talking. Even I think that’s a good idea. But – four items, or five – Money Box will, as ever, be what we like to call ‘a good listen’ on Saturday at noon (repeated Sunday at 9pm). Never miss a show again by subscribing to our podcast. Do that through our website bbc.co.uk/moneybox where you can also read stuff, watch stuff, download stuff, click on stuff, and send us stuff.

Best wishes,

Paul

PS. Don’t forget the programme taster on BBC Breakfast between a quarter to nine and nine o’clock.

e-mail Paul Lewis