Over a million Barclays Isa customers to suffer rate cut

Over a million Barclays Isa customers to suffer rate cut

Barclays is shifting 1.6 million Isa customers onto a worse-paying cash Isa from November.

In order to "simplify the range" of the bank's Isa products, customers with any of 11 now 'off-sale' Isas will see their old accounts become the Instant Cash ISA Issue 1, which pays a tiered interest of between 1.29 and 1.49% AER.

However, eight of the 11 old accounts pay better rates than the Instant Cash Isa. The customers who will lose out include those with the following accounts: ISA Saver Issue 1; ISA Saver Issue 2; Golden ISA; Golden ISA Issue 2; Golden ISA Issue 3; Loyalty Reward ISA; Direct Cash ISA and Freestyle Cash ISA.

The best paying of those accounts is the Freestyle Cash ISA, which has an AER of 2.8%. The worst is the ISA Saver - Issue 1 paying 1.51% AER, which is still 0.02 percentage points higher than the new Instant Cash ISA.

The 740,000 customers of the three accounts that will see an uptick in their interest rate when the transfer happens this winter are those with a Barclays Cash ISA, a Tax Beater ISA or a Tax Haven ISA, which currently pay 0.1, 0.56 and 0.83% respectively.

Find the best Cash ISA or savings Account for you

The new account will pay 1.29% AER on balances between £1 and £14,999, 1.39% between
£15,000 and £29,999 and 1.49% on £30,000 and above. Transfers in will be allowed. Access is in branch, over the phone, online or via mobile banking.

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.

"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."

Which instant access cash Isas beat the Barclays Instant Cash Isa - Issue 1?

On balances up to £14,999, there are more than 30 accounts listed on Moneywise.co.uk/compare that better the Barclays rate. The top three currently are the Buckinghamshire Building Society Chiltern Gold Nuggets Issue 4 paying 2% AER, the Punjab National Bank (International) Variable Rate Cash ISA also paying 2% and the First Direct Cash ISA paying 1.85%.

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Your Comments

HSBC have informed me that their e-ISA rate will be cut from 1.7% to 1.0% from October.
This is such a dramatic drop that now is the time to change bank, even though I've been with them for 42 years. Goodbye HSBC.

I'm also going to change my phone and broadband away from BT.
I now actively seek out companies that will give loyal customers at least equal offers and value that they offer to new customers. Why can't BT give me half price broadband for 6 months? After all, I've contributed to their profits for many years. Goodbye BT.

A few years ago I found an insurer that will not lower the premium that they quote. This is an honest way to do business: offer the best value possible and stick to it.
Think about it - if your insurer will offer you a reduction when you tell them that you can get a better deal, then it is very clear that they could have given you a cheaper quote, but no, they try it on and rip you off.