Standard Life Bank savers hit by rate cut
0 Comments | Herald, The; Glasgow (UK), Jul 29, 2010 | by ian mcconnell
BANKING giant Barclays is moving to cut interest rates paid by Standard Life Bank on customers’ savings only weeks after finalising its takeover of this Scottish operation, even though base rates have been unchanged since March 2009.
Barclays is mailing more than 200,000 customers of Edinburgh- based Standard Life Bank this week notifying them of the cuts in savings rates.
Standard Life Bank had, prior to its sale by life and pensions giant Standard Life to Barclays for pound(s)226m, tended to move savings rates when base rates were shifted.
Barclays is, from October 1, cutting the annual interest rate on its direct access individual savings account (ISA) from 2.65% to 2.3%. The rates on its direct access savings account are also being cut from October 1. The gross rate for balances between pound(s)1 and pound(s)1000 will be cut from 0.9% to 0.7%, with that for amounts between pound(s)1000 and pound(s)2500 reduced from 1% to 0.7%.
Rates paid on Standard Life Bank’s various other savings products will also be cut.
Asked by The Herald for his view of the move by Barclays, Jim Spowart, who set up Standard Life Bank in the mid-1990s before moving to Halifax in 1999 to set up Intelligent Finance, said: “All these banks that I set up were people champion banks. They were banks that were meant to deliver good value for the consumer, which they did.”
Spowart, giving his impression of general banking sector conditions at the moment, added: “Unfortunately, in the current climate, I think that is something that is lacking. I think innovation is lacking, and the competitiveness, because everyone feels they don’t need to be competitive because people are struggling with their mortgages and they are struggling with their savings to get good rates. More or less anyone can offer what they want in the market-place.
“Margins (charged by banks) have been widening both in the personal sector and in the business sector, and that is not good for the consumer.”
Spowart noted Barclays had paid “quite a good price” for Standard Life Bank.
Barclays earlier this month announced plans to close Standard Life Bank’s cash savings and mortgage centre at Edinburgh’s Ex- change Crescent, which employs 254 staff, in December 2011, and to integrate these functions into its own retail banking operations
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