Spotlight on…Virgin Money

02nd February 2018

Our regular Provider Focus series of articles is always hugely popular, shedding light on some of the new names in the savings market and lesser-known providers, providing useful background and information.

However, we thought that you would also find it useful to find out more about those providers that are better known, providing insight that you may not have considered before. We all think that we’ve found out all there is to know about these providers, but there may be some aspects of their background and offerings that you’ve not explored before.

We hope that you find this information useful and, as always, if you have any feedback or suggestions as to who should appear in a future Provider Focus or Spotlight article, please let us know.

The provider chosen to kick off the series is Virgin Money, a regular presence in our best buy tables, particularly amongst cash ISAs, as evidenced by its clinching of both Best Fixed Rate Cash ISA Provider and Best Overall Cash ISA Provider in the 2018 Savings Champion Awards.

Virgin is a household name, with many different products and services covering a wide range of our needs, from telecoms and media to travel and leisure. But what about Virgin Money, the financial services wing – how much do you know about this part of the group? Read on to find out more!

Background information and history

Virgin Money was founded by Sir Richard Branson in 1995 and was originally known as Virgin Direct. Its first offering was an investment, a Personal Equity Plan (PEP) which was considered to be one of the cheapest on the market. According to its website, it received 4,000 calls on its opening day, so obviously struck a chord with the general public!

The next big development came in 2002, when Virgin Direct and virginmoney.com (which was an investment supermarket which had been launched in 2000) merged to become Virgin Money. 2002 also saw the launch of the Virgin Credit Card.

But they had still not launched into the savings market.

In 2007, Virgin attempted to expand its banking operations by making a bid for the troubled Northern Rock Bank, but the initial bid was not successful and Northern Rock was instead nationalised by the Government.

Virgin Money achieved its aim to obtain a banking licence in 2010, by acquiring the Somerset-based regional bank, Church House Trust. This allowed Virgin Money to begin offering its own banking products.

In 2012, Virgin Money was finally successful in its aim to acquire Northern Rock, combining its products with the Northern Rock ones and increasing its high street presence by utilising Northern Rock’s 75 strong branch network.

Since then, the Northern Rock brand has disappeared, making the Virgin Money brand now an established presence on our high streets through its branches (or stores as it prefers to call them!).

In 2014, Virgin Money launched the Virgin Money Foundation, which is a charitable foundation which invests in projects to support people and organisations to change their communities for the better.

Virgin Money’s head office and operations are mainly based in the North-East, with its registered office in Newcastle-upon-Tyne and other offices in Gosforth, Edinburgh and Norwich.

Virgin Money has branches throughout the UK, with most areas of the country served by at least one branch. As with any bank, some areas are better served than others, but if you prefer face to face interaction, there could well be one that is accessible to you.

Crucially, Virgin Money is authorised by the Prudential Regulation Authority (PRA) and regulated by the Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA). Virgin Money is a member of the Financial Services Compensation Scheme (FSCS), so funds placed with the provider would be covered up to £85,000 per person, should the provider go out of business.

For more information on the FSCS, please take a look at our handy guide or call us on 0800 321 3581 to speak to one of our expert savings advisers.  

How do they fare in today’s savings market?

As mentioned above, Virgin Money has a consistent presence in our best buy tables and has done for a number of years now. The provider offers a wide range of different types of account, from easy access and fixed rate bonds to the cash ISA equivalents. Also available are a Help to Buy ISA and even a recently added a savings account for businesses.

At the time of writing, its range of fixed rate cash ISAs are far more competitive in the current market than its fixed rate bonds, with its one, two and three year ISAs all featuring in our best buy tables – with the two year ISA the current market leader.

Also market-leading is the provider’s recently launched easy access cash ISA, paying 1.21% tax free/AER. For those looking for their first home, its Help to Buy ISA is also competitive, lying joint second in our table, paying 2.25% tax free/AER.

One feature of Virgin’s current offerings is consistency between the different application channels on offer. For example, its fixed rate and variable rate cash ISAs are available either online or in branch and by post, with the same rate offered on both. With some savers preferring to use branches or the post, this is to be commended, offering choice without having to accept a lower return.

For alternatives and to compare the accounts on offer from Virgin Money to the rest of the market, please take a look at our Best Buy Tables.

Application process and customer service

As mentioned earlier, you can apply for and manage most accounts from Virgin Money either online or by post and branch and the minimum opening balance requirement generally is just £1, making the accounts very accessible. Online only applications are common amongst many of the top savings rates at the moment, so the option to open accounts by branch and post may be attractive to those who do not have access to the internet or prefer not to use it for financial transactions.

The application process appears to be straightforward and whilst we have not been made aware of any negative experiences so far from any of our clients or from our own dealings with the provider, a larger provider naturally has more customers and so there is plenty of feedback that you can share with us.

As mentioned earlier, your thoughts and experiences about providers’ customer service are invaluable for us - for every provider that we feature in our tables - so please get in touch to share any feedback you have. 

A final word…

Our main aim at Savings Champion is to arm you with the information you need to make the right savings choices for your unique circumstances. Information about providers is a vital part of this and can really help you to have the confidence to switch to a better rate if you are wavering.

But you have an important role to play in this, by sharing your feedback about providers, you will assist us in keeping your fellow savers informed and help them to avoid poor customer service.

Providers like Virgin Money are driving competition in the savings market and as a group offer some of the best rates available, giving you a genuine alternative to the big high street banks, which in contrast are offering some of the worst rates on the market.

The best strategy is to look at all options and take each provider on its own merits, considering alternative providers to get the best returns for your money. As long as you do your research (or ask us for more information!) and are comfortable with the provider, there is no reason not to consider them.

As mentioned earlier, if there is a provider that you would like to see featured in a future article, please let us know. We are also keen to hear from you if you have any feedback about any provider’s customer service, good or bad! Please contact us at [email protected]

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