Killing you softly – Barclays and Standard Life Bank

When Standard Life Bank first launched we were big fans. It was one of the first with flexible mortgages – Freestyle – and we took one of those out with it, with the majority of the transaction being completed quickly and easily online and over the phone.

We also opened a number of its Direct Access savings accounts. Yes, it paid a competitive rate of interest and offered easy online and phone access. But what we also liked about it was that we were able to split our savings into a number of pots – for example one for each of the kids, one for home improvements, one for holiday savings and so on.

The real beauty of this was that for the purposes of the tiered interest rate Standard Life Bank added all of the balances of all the pots together. So our five small savings accounts earned interest as if it was one large one.

All in all you felt that Standard Life Bank was bringing a new fresh and customer friendly approach to savings and mortgages with a nice bit of customer service thrown in.

Last year, however, Standard Life Bank was sold to Barclays. At the time of the transfer Barclays said “Barclays is committed to providing exceptional service to all Standard Life Cash Savings & Mortgages customers”.

Sadly this commitment seems to have been short lived. From July this year all Standard Life Bank savings accounts are to be discontinued. What’s more Barclays will no longer be adding all of the savings pots together for the purposes of the tiered interest rates. Why would they do this? Yes, it is a small change and, depending on how big your savings are it may not make a lot of difference financially. But there’s no upside for customers, just more profit for Barclays. It is surely indicative that Barclays doesn’t really care about these customers.

Fortunately I read the letter telling me that this was happening. So we’ll be closing our accounts and moving our savings elsewhere. My guess is that Barclays is hoping that most customers will be more apathetic and that the majority of savings balances will sit on the balance sheet for months and even years to come, earning, presumably, ever lower interest rates.

For all the talk of banks having to rebuild trust with the public, this is exactly why they will struggle to do so. For as long as banks routinely chip away and interest rates and benefits for existing customers whilst going all out to attract new ones, they will never earn our trust.

UPDATE: Since this was published I had another letter from Barclays / SLB saying they had decided to delay removing the “pooling”.

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