Barclays Bank to close 11 cash ISAs
07/08/2014
Barclays Bank is set to close 11 of their cash ISAs (Individual Savings Accounts), meaning 2.3 million customers will be moved onto a simplified product range.
The simplification of their ISA range means that 1.6 million savers will be put on a worse interest rate than before, although 740,000 will be put on the same or a better rate.
Lee Chiswell, head of savings at Barclays Bank defended the move saying it will “make it easier” for customers to understand the products on offer.
He continued by stating: "We are writing to all impacted customers to let them know how these changes will affect them, and we have worked with our colleagues to ensure they can support customers who have any questions about these changes."
Worse off
The concerns for some savers are that they will be moved onto an ISA that has a lower interest rate, meaning they will not be earning as much money on their savings.
The product that savers will be moved to is called the ‘Instant Cash ISA Issue 1’, and it pays:
- 1.29% AER on savings up to £14,999
- 1.39% AER on savings of £15,000 to £29,000
- 1.49% AER on savings of more than £30,000
However, many savers that are being moved are currently earning an interest rate of more than 2%, which means that 95% of those moving to a lower rate will effectively lose an average of £2.22 a month.
Barclays Bank are following competitors such as RBS and Natwest by simplifying their ISA range and moving savers to other products, as these banks recently made similar moves.
The rules for saving in an ISA were updated recently, when Chancellor George Osborne announced that the tax-exempt annual savings allowance for an ISA would be increased to £15,000. Additionally, savers were also told they could split this in any combination between a cash ISA and a stocks and shares ISA.
Need financial advice?
If you have any personal finance questions related to this news article, then please contact our financial advisers. You can get in touch by asking a question online, calling us on 0800 092 1245, or by arranging a visit.
Share this..
Related stories
Government U-turn on post offices
The government has intentionally leaked plans for the UK Post Office network to the press this week amid signs that a massive U-turn is underway. After initially looking to downsize the Post Office, sell-off the more profitable areas and withdraw from many local communities, Lord Mandelson is believed to be pushing ahead with new plans to make the UK Post Office network a "mini community bank". So...
Read MoreSantander fined for financial advice failings
31/03/2014 The Financial Conduct Authority has fined Santander £12,377,800 after the bank was found to be failing to offer adequate financial advice to its customers. The FCA reported a concern over Santander’s approach to considering investors’ risk appetites. There was a significant concern that customers were not being given the correct advice based on their appetite for risk....
Read MoreCompetition for Northern Rock takeover
Northern Rock is set to become the focus of takeover speculation over the coming weeks with news that National Australia Bank and Virgin Money appear set to fight it out for the chance to acquire the controversial UK bank. It is no secret that Northern Rock is currently being split in two by the UK government, into a good bank and a bad bank, and the good bank will be sold off to the highest bidde...
Read MoreUK interest rates set to fall to lowest level on record
With UK interest rates set to fall below 2% this week this will officially be the lowest base rate in the 300 year history of the Bank of England. This perfectly illustrates the serious nature of the downturn in the UK economy and the government has again insisted that rates need to fall, at least in the short term, to try and kick-start an economy which is literally falling to its knees once agai...
Read MoreIs free banking under threat again?
As the UK banking arena moves out of recession and back into a growth phase there are growing concerns that so called "free banking" is again under threat. While in reality there is no such thing as "free banking" in the UK or anywhere around the world, whether this takes in direct charges or indirect charges, we are starting to see an increase in service charges and banking fees. A number of a...
Read More