Barclays is planning to axe 11 instant access Cash ISAs no longer available to new customers, in a bid to ‘simplify’ its range.
From 5th November it will transfer the 2.3 million savers using these old accounts onto its newer Instant Cash - ISA Issue 1. The Instant Cash ISA - Issue 1 allows transfers-in and offers tiered levels of interest.
You can get 1.29% AER on balances up to £14,999, 1.39% on balances between £15,000 and £29,999 or 1.48% on balances of £30,000 plus.
Around 1.6 million savers will find they are moved onto a worse rate, while 740,000 will see no change or find they are put onto a better deal.
Lee Chiswell, Head of Savings at Barclays said: “We want to simplify the way we do business with our savings customers. These changes will make it easier for our customers to understand their products, and easier for our staff to serve them. Customers will also have the added benefit of being able to transfer-in."
Impacted accounts
The table below lists the 11 accounts due to be closed alongside the current rates of interest each pay.
|
Accounts to be axed |
Tax-free rate pa % |
AER % |
|
Barclays Cash ISA |
0.10% |
0.10% |
|
Direct Cash ISA |
1.79% |
1.80% |
|
Freestyle Cash ISA |
2.76% |
2.80% |
|
Golden ISA |
1.79% |
1.80% |
|
Golden ISA – Issue 2 |
1.79% |
1.80% |
|
Golden ISA – Issue 3 |
1.79% |
1.80% |
|
ISA Saver – Issue 1 |
1.50% |
1.51% |
|
ISA Saver – Issue 2 |
1.72% |
1.73% |
|
Loyalty Reward ISA |
2.01% |
2.03% |
|
Tax Beater Cash ISA |
0.56% |
0.56% |
|
Tax Haven ISA |
0.83% |
0.83% |
The worst affected customers will be those who hold the Freestyle Cash ISA, which currently pays 2.80% AER. Savers with a balance of just under £15,000 will see their return more than halved when it is transferred, losing over £220 in interest a year.
Those with a Loyalty Reward ISA, ISA Saver - Issue 1, ISA Saver - Issue 2, Golden ISA, Golden ISA - Issue 2, Golden ISA - Issue 3 and Direct Cash ISA will also be worse off under the changes.
The biggest winners will be those savers with a Barclays Cash ISA, which pays a paltry rate of 0.10% AER. Savers will receive a significant boost compared to what they currently get, amounting to nearly £180 more in a year for those with a balance of just under £15,000.
Those with a Tax Haven ISA and Tax Beater Cash ISA will also benefit from the move.
Barclays is writing to all impacted customers to let them know about the changes. But if you think your pot is about to be moved onto a worse deal take a look at The best Cash ISAs to see where else you could put it.
Under pressure
The Financial Conduct Authority (FCA) is currently investigating the UK cash savings market, which is estimated to be worth £1 trillion.
Last month the regulator revealed its interim findings which showed banks and building societies pay lower interest on older accounts because most savers don’t move onto a better deal. Read more in Loyal savers exploited.
The final market study into the UK cash savings market and its recommendations will be published later this year.