Sharp rise in “tied” financial products

by Gill Montia

Story link: Sharp rise in “tied” financial products

New research from Which? claims that the number “tied” financial products is on the rise, with the proportion of tied mortgages and regular savings products having doubled since the beginning of the year, to 18%.

According to the consumer group, some tied products offer poor value for money and the trend could discourage consumers from shopping around to get the best deals.

Tied products are available exclusively to the existing customers of the provider, or to those prepared to qualify as such by, for example, opening a current account.

Which? reports that in the case of First Direct, the lender is offering a market leading deal on a five-year fixed-rate mortgage but applicants need to hold a First Direct current account that doesn’t pay any interest on credit balances.

The watchdog’s chief executive, Peter Vicary-Smith, says: “If you’re considering taking out a tied product, look at the whole package to work out whether it offers a good deal.”