Lloyds Banking Group to scrap 47 savings accounts
If you have a savings account with Lloyds Bank, Halifax or Bank of Scotland, chances are you will shortly be receiving a letter informing you that your account is being scrapped and your cash will be moved into a single variable ISA, web saver or instant-access account paying 0.25% early in the New Year.
This is, of course, all in the name of simplification, with Lloyds Banking Group saying: “We are commencing a simplification of our savings accounts. Providing a simpler range of accounts for our customers means that they can make the most of their savings in a simple, clear and easy way.”
Sounds nice and friendly doesn’t it? However, while two thirds of customers will reportedly get an improved rate as a result of this 'simplification', some customers will see their savings rate drop from 0.95%. And if losing 0.7% interest a year is bad, how much worse is it that 67% of people saving with the Lloyds Banking Group are currently getting a rate lower than 0.25%?
Customers will be given two months’ notice of the changes and offered the chance to swap accounts before they are automatically switched. However, Which!!! are recommending that affected customers use this forced change as a swift kick up the bank account, and that they start looking around to see what better rates might be available.
A quick search of moneyfacts.co.uk, for example, which is just one of a number of comparison sites, shows that, even for instant access savings accounts without a bonus rate, you could easily better the 0.25% rate by five or six times. with 1.25% accounts ten a penny on the market. If you’re looking at variable rate Cash ISAs, you can get 1.5% even with National Savings, and the top rates could be paying out over 1.8% tax free. That’s pretty simple eh Lloyds?