Barclays quietly slips in interest rate cut on savings

The bank, which operates savings accounts under both the Barclays and the Woolwich brands, is cutting the interest it pays on its cash individual savings accounts (ISAs) by up to 0.45 percentage points. Its Woolwich Card Saver deal will now pay up to 0.3 percentage points less, while rates on the Barclays e-savings range will fall by up to 0.12 percentage points.

All the rate cuts took effect on 1 June, though Barclays failed to advertise the reductions until four days later, on 5 June, when it placed announcements in a national newspaper.

However, Andrew Jones, Barclays' retail banking product director, defended the timing of the cuts. "Most of our main competitors have already changed their savings rates and we have taken the opportunity to review ours," he said.

Rachel Thrussell, head of research at analyst Moneyfacts, said Barclays was one of many savings account providers to have cut interest rates this year, even though many analysts expect the next move from the Bank of England's Monetary Policy Committee to be upwards.

"The banks give all sorts of reasons for cutting rates but the one issue they don't mention is that their margins are under pressure and they need to boost profits," Thrussell said. "Many people will not have realised their interest rates have fallen, and I think many banks will be looking at where they can tweak rates without customers noticing."