Barclays is taking over the ING Direct savings and mortgage business in the UK. 1.5 million customers will be affected.
For the moment, there are no signs that the ING Direct name and orange website will suddenly turn Barclays’ blue. But there are questions that remain unanswered.
For SavingsChampion users, the big one is interest rates. Barclays says: ‘Customers are expected to continue to enjoy at least equivalent terms and conditions to those which they currently enjoy with ING Direct UK’.
So that’s ‘expected’ not ‘will enjoy’ and certainly no mention of savings rates. That doesn’t really fill us with confidence.
ING Direct is a regular Best Buy candidate, although it seems unwilling to stay at the very top. Rate changes are a weekly occurrence if it looks too competitive.
This week, its Direct Savings account pays 2.7% gross (including bonus) to new savers only, existing savers get less. It pays a decent enough 2.8% on Cash ISAs, although other providers offer more. And anyone transferring in an old ISA gets a lower rate of 2.5% - which seems rather unjust, so why bother/think carefully.
Barclays rarely bothers our Best Buy tables. Perhaps branchless internet ING Direct customers should be worried about that. Barclays pays as little as 0.10% on its own e-savings offers.
Barclays customers do a little better on the ISA front - but not brilliantly. Its woefully misnamed Loyalty Reward ISA pays 2.64% gross, providing customers have a Barclays current account or at least £500 festering in another Barclays savings account.
Then there is the issue of Consumer Protection. ING Direct is not part of the UK Financial Services Compensation Scheme but registered under the scheme run by the Dutch Central Bank.
Although it’s a positive thing that ING Direct UK will eventually come under the UK FSCS, anyone with both ING Direct and Barclays accounts should consider their position when this happens, because of the £85k limit
UK customers are not the only ones affected by ING offloading its Direct operations. The US business went to Capital One in February. The Canadian business should go to ScotiaBank by the end of the year. Tot ziens, ING Direct!