24 Nov 2024

Supermarket price war spills into finance

In recent months the contest between the supermarkets has heated up, as they fight it out to offer lower priced goods to help us all through the recession.

Now the battle has moved from the supermarket shelves into the world of finance as both Tescos and Sainsbury’s increase the rates for savers.

Whether its savings, credit cards, loans or life assurance, the supermarkets offer some highly competitive deals.

(See appendix for how supermarket deals compare)

Michelle Slade, spokesperson for Moneyfacts.co.uk, commented:

“Many consumers are disillusioned with traditional banks and instead are looking for an alternative provider for their finances.

“The combination of competitive deals and a strong brand that consumers already know and trust is a real winner for the supermarkets.

“Smaller providers are relying more heavily on their savings books to fund their lending activities and in turn are offering the most attractive savings rates.

“By comparison, many high street banks have a number of alternative ways of raising funding and tend to offer less attractive deals.

“Tesco has already announced its intention to open branches and to move into offering mortgages and possibly current accounts. It will be looking to make its mark in these new areas and is likely to enter the market with highly competitive deals.”

Savings (Internet)

	Provider	Account	Rate	Bonus	Deposit
Top account	Egg	Egg Savings Account	3.25%	Rate includes a 2.00% bonus for 12 months	£1
Supermarket offering	Tesco	Internet Saver	3.00%	Rate includes a 1.75% bonus for 12 months	£1
Supermarket offering	Sainsbury’s Finance	Internet Saver	2.90%	Rate includes a variable bonus (currently 2.39%) for 12 months	£1,000
Source: Moneyfacts.co.uk 25.8.09

Credit Cards (Introductory Purchases)

	Card	Introductory Deal	APR
Best Deal	Tesco Personal Finance Clubcard MasterCard	0% for 12 months	16.9%
Supermarket offering	John Lewis and Waitrose Partnership MasterCard	0% for 6 months	16.9%
Supermarket offering	Sainsbury’s Finance MasterCard	0% for 3 months	16.9%
Supermarket offering	ASDA MasterCard	0% for 3 months	17.8%
Source: Moneyfacts.co.uk 25.8.09

Credit Cards (Balance Transfers)

	Card	Balance Transfer Deal	APR
Best Deal	Virgin Money Credit Card MasterCard	0% for 16 months	16.6%
Supermarket offering	Sainsbury’s Finance MasterCard	0% for 10 months	16.9%
Supermarket offering	ASDA MasterCard	0% for 9 months	17.8%
Supermarket offering	Tesco Personal Finance Clubcard MasterCard	0% for 6 months	16.9%
Supermarket offering	John Lewis and Waitrose Partnership MasterCard	0% for 6 months	16.9%
Source: Moneyfacts.co.uk 25.8.09

Personal Loan (£5,000 loan for new customers)

	Lender	APR	Monthly Repayment
Best Deal	Sainsbury’s Finance	7.9%	£155.40
Supermarket offering	Tesco Personal Finance	8.7%	£157.59
Source: Moneyfacts.co.uk 25.8.09

Life Insurance (Male non smoker 30 next birthday, £100,000 sum assured, 25 year term)

	Provider	Monthly Payment
Best Deal	Lutine Assurance	£6.13
Supermarket offering	Tesco Personal Finance	£7.19
Supermarket offering	Sainsbury’s Finance	£7.20
Source: Moneyfacts.co.uk 25.8.09

Moneyfacts Group
Moneyfacts is the UK’s leading independent provider of personal financial information and our data is used and trusted throughout the financial industry.

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