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ING shouldn't be allowed to sell to Barclays

Ed Bowsher
by Lovemoney Staff Ed Bowsher on 09 October 2012  |  Comments 9 comments

Barclays said today that it's buying ING Direct in the UK. This deal isn't good news.

ING shouldn't be allowed to sell to Barclays

I can understand why the Dutch bank ING Direct is selling its UK business to Barclays. It makes sense for ING to concentrate on markets where it has a large branch network and it’s getting a reasonable price from Barclays.

But this deal isn’t good news for the British consumer. I’ve said before that we desperately need more competition in the UK banking market, but this deal is going to reduce competition. That’s not healthy.

ING Direct currently offers some attractive savings accounts and mortgages, and I fear that customers may lose out in the long term.

True, Barclays has said that ING Direct customers should expect their accounts to retain at least equivalent terms and conditions when the deal goes through next year. But I fear that will gradually change.

Even if I’m wrong, why take the risk of that happening? It would make much more sense for the ING UK business to be sold to a ‘challenger’ player such as Tesco, Virgin or Co-op. Today's news is a real shame.

Positive

That said, there is one positive aspect to the deal. It suggests that new Barclays boss, Antony Jenkins, wants to focus on the retail banking rather than the ‘casino’ investment banking business.

It’s also worth noting that the savings protection for ING savings customers will change as a result of this deal. If ING Direct went bust tomorrow, savers would be able to claim compensation from a Dutch government scheme. But once the deal has gone through, savers will be protected by the UK’s Financial Services Compensation Scheme (FSCS).

I imagine that Barclays and the former ING Direct business will share the same banking licence. So if you currently have £75,000 with Barclays and £75,000 with ING, you’d only get protection up to £85,000 on savings worth £150,000.

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Comments (9)

  • lesjking
    Love rating 6
    lesjking said

    And for that reason, I am taking my money OUT !!

    No way are Barclays going to get their hands on my hard earned money so that they can gamble at the private individuals expense.

    Please all follow suit ?

    Report on 09 October 2012  |  Love thisLove  2 loves
  • fender
    Love rating 20
    fender said

    I have been an ING account holder since 2005 But I also will be taking my money out of ING.

    I have been ripped off too many times by Barclays and the false promises made by what they call "corporate managers".

    So as soon as that bunch of shysters take over ING my money is coming out, I will not lend that lot a penny of my money. In fact I think my money would actually be safer in the hands of loan sharks than Barclays.

    Report on 09 October 2012  |  Love thisLove  2 loves
  • celticlass
    Love rating 9
    celticlass said

    I'm disappointed by the sell off to Barclays as I've had excellent service from ING over several years, something British banks could well learn from! I have an ISA which I took out just a couple of months ago as the rate was better than that offered by any other bank here. I'd like to close it and move it elsewhere but will I lose any interest gained??

    Report on 09 October 2012  |  Love thisLove  0 loves
  • andrewjameshowar
    Love rating 25
    andrewjameshowar said

    i haven't put any money in my Ing accounts for ages because unless you were a new customer in the first 12 months, their rates were uncompetitive. There are dozens and dozens of financial institutions in the UK offering savings accounts, all with the govt guarantee of the first £85k. One less won't make any difference.

    Report on 09 October 2012  |  Love thisLove  0 loves
  • athomik
    Love rating 11
    athomik said

    I have a mortgage with ING - still a pretty good deal, even in today's climate. I used to bank with Barclays for a few years, but changed shortly after I got married in 1986. I'm not letting those gangsters, with their third rate service, rip me off again. Time to look for another decent mortgage deal.

    Report on 09 October 2012  |  Love thisLove  0 loves
  • NickH
    Love rating 0
    NickH said

    I wonder just how many ING accounts Barclays will retain-certainly not mine!

    Report on 09 October 2012  |  Love thisLove  0 loves
  • finnol49
    Love rating 22
    finnol49 said

    I am planning to move my ING cash ISA. I got a decent interest rate when I opened it, but now it's a pittance. Seriously, I don't want to give any more of my business to Barclays!

    Report on 10 October 2012  |  Love thisLove  0 loves
  • Nick C
    Love rating 2
    Nick C said

    I hope the ING customers do not get the treatment I have had. I opened my Barclays account in 1951 and had not used it recently but went to pay in some money - it was an account in credit too. I tried to access the account but found that Barclays had closed the account and taken the small amount for themselves!! I asked them where it was and they said that they could not trace me and I should have read the small print in 1951!! I am in the local phone book and have lived in the same home -locally- for 42 years!! I had an interview with a local Manager for 1 hour and 7 weeks later got a cheque for my money which they had taken! In between they have sent me a new Barclaycard as they have taken over EGG!! Watch your funds ING customers!! NC

    Report on 11 October 2012  |  Love thisLove  0 loves
  • The Bank Manager
    Love rating 72
    The Bank Manager said

    Hi 'celticlass',

    As you have an ING ISA, what you need to do is look around on comparison websites for another ISA that will accept transfers in.

    Do you know if you have an instant access cash ISA, or is it a fixed rate/term ISA?

    Whatever you do, do not try to cash in the funds, as you'll get your gross interest, but will not be able to use the full annual ISA limit again this financial year - i.e. if you deposited £5,640 on 6th April 2012, you can cash that and take the funds to another provider this year, as you have fully used your allowance.

    Instead, find a new provider, ask them to assist you with a transfer and they will send off your request to ING, so the monies can retain their tax free status.

    When the monies get to the 'new' cash ISA, you'll also have the benefit of the accrued interest being applied, so in effect, your balance is likely to be higher at the ISA, than that which is currently on the ING ISA statement (unless you have any penalty to pay?).

    The ING website suggests that from 03-08-2012, it offered 2.96% Gross P.A. as the rate guaranteed for 12 months from account opening, reverting to 1.00% Gross P.A. thereafter (3.00% AER).

    If you took out your ISA from 27-07-2012 they offered 3.15% Gross P.A., reverting to 1.00% Gross P.A. after 12 months (3.20% AER).

    Now recently, the financial sector has once again squeezed rates for savers and increased those for some borrowers (the Santander SVR mortgage rate springs to mind, increasing from 4.24% to 4.74%), so taking a general peek at some sites, I'm aware that M&S Money do a 1 year fixed rate cash ISA at 3.10% AER that allows transfers in. You need a minimum deposit of £500 and can apply by post or phone. The caveat here though, is that being a fixed account, if you wish to withdraw funds, there is a £50 penalty (see the M & S Bank site for greater detail).

    Marks & Spencer has the full £85,000 UK savings safety guarantee under the Financial Services Compensation Scheme, but being part of the HSBC Group, if you already have £85,000 in investments with HSBC, additional funds with M & S Bank might not be covered. Ask them first (0808 002 2222).

    Hope this helps you?

    Report on 13 October 2012  |  Love thisLove  0 loves

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