Barclays has paid out a whopping £9.25 million in bonuses to chief executive Bob Diamond and former chief executive John Varley – but this generosity is not reflected in interest and bonus payments to savers with the bank.
Barclays paid out mega bonus packages to both men on top of their salaries – Diamond was paid £250,000 and Varley £1.1 million last year.
A calculator.co.uk review of Barclays ISA and savings account rates show that only a couple of accounts open for more than a year pay more than a measly 0.1% AER.
Barclays, in common with other banks and building societies, flatters to deceive with savings accounts by offering introductory ‘bonus’ rates that generally run out after 12 months.
This means savers who leave their nest eggs in place pick up miserly returns, while the provider then switches the big guns of attractive headline rates on new savers.
Inflation means most savers are losing money with Barclays
Barclays advertises 29 closed savings interest rates online. All are closed to new investors.
Only four accounts pay a rate of better than 0.1% AER.
Despite their grand sounding names to hook savers, some of the lowest rates are:
- MoreForMore Savings – Pays 0.5% AER for cash holdings of less than £25,000
- Tax Beater Cash ISA – Pays 0.56% AER
- Tax Haven ISA – Pays 0.83% AER
The Golden ISA 3, with a headline rate of 3.25% AER that includes a 1% tax free bonus for 12 months is currently open to savers.
But Golden ISA offerings in previous years show all that glitters is not necessarily gold – Golden ISA 2 currently pays 2.08% AER and Golden ISA 1 pays 2.25%AER today.
Factoring in inflation at 4% means savings in those accounts are shrinking by up to -1.92% a year.
To compare savings rates with borrowing rates, finding the Barclays standard variable rate for mortgages is 4.99%, which is 4.49% above the Bank of England base rate of 0.5%.
