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Barclays Bank to close 11 cash ISAs


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.

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