Lloyds Cash ISA trick

Pendle_Gazza

opinions4u wrote: »

I really do wish people would take responsibility for their own money instead of expecting profit making banks to be charities.

With respect, I think that's a rather disappointing and narrow minded attitude to take. Just because it is something you are clearly capable of managing very well doesn't mean that everyone else could/should automatically be able to cope likewise. You can be sure there are things we are all very poor at (which can also cost us our own money), that would come as second nature to someone else. Some will always 'clam up' when it comes to money management.

While I think it is fair to suggest that most who complain about their rates dropping to next to nothing etc. do only have themselves to blame, it is clear that the banks blatantly exploit such people. No-one expects them to be charities, as you put it, but neither should people expect them to take the p*ss, which is another way one could describe their practices. IMHO, allowing savings accounts to drop to obscenely low levels, such as the 0.05% and 0.1%'s you regularly see, is somewhat harsh.

I say this as a reasonably savvy saver by the way, not someone who has fallen foul of this. After having had two or three banks/societies in my first (lots of) years, I've probably had to open and close more new ones in the last decade than I've had birthdays!

dunstonh

With respect, I think that's a rather disappointing and narrow minded attitude to take. Just because it is something you are clearly capable of managing very well doesn't mean that everyone else could/should automatically be able to cope likewise.

Its not difficult to realise that a 12 month bonus rate is going to end in 12 months.

No-one expects them to be charities, as you put it, but neither should people expect them to take the p*ss, which is another way one could describe their practices.

Whilst I dislike these bonus rates, they exist because of how the consumer buys today. They are not taking the p*ss. They are quite clear in what they offer and for how long. Frustrating they way they do it, yes. However, that is all.

IMHO, allowing savings accounts to drop to obscenely low levels, such as the 0.05% and 0.1%'s you regularly see, is somewhat harsh.

Although that is not what this thread is about.

opinions4u

Pendle_Gazza wrote: »

With respect, I think that's a rather disappointing and narrow minded attitude to take.

I'd call it pragmatic and realistic.

Please read that in the context of my personal belief that providers should write / email at the end of a bonus. Also in the belief that Lloyds TSB, for ISAs, do exactly that (in contradiction of the post I was commenting on).

Just because it is something you are clearly capable of managing very well doesn't mean that everyone else could/should automatically be able to cope likewise.

We're not talking Krypton Factor mind games here. We're talking a product that does something for a year and then stops doing it. Tap on. Tap off.

While I think it is fair to suggest that most who complain about their rates dropping to next to nothing etc. do only have themselves to blame, it is clear that the banks blatantly exploit such people. No-one expects them to be charities, as you put it, but neither should people expect them to take the p*ss, which is another way one could describe their practices. IMHO, allowing savings accounts to drop to obscenely low levels, such as the 0.05% and 0.1%'s you regularly see, is somewhat harsh.

While I'm not a fan of comparing rates to BofE, easy access savings rates have usually been 1%-2% below BofE. It's actually quite surprising that fees for low balance accounts haven't been introduced.

jimjames

Markie11 wrote: »

For somebody who knows what they're doing and has a financial head on their shoulders. For some others who don't then it's always good to be able to help them out with threads like this.

Something I noticed in your post was that you were withdrawing money from an ISA to pay into another account. Not sure if you realise that by doing so you lose the tax advantages of the ISA and at £11k it is too much to pay back into this years ISA. To retain the tax free benefit of your ISA you need to transfer not withdraw.

I realise this may well not apply to you and there could be a good reason to do what you did but others who are less aware may be as frustrated with their bank and withdraw the cash in anger without realising what they are doing.

Markie11

jimjames wrote: »

Something I noticed in your post was that you were withdrawing money from an ISA to pay into another account. Not sure if you realise that by doing so you lose the tax advantages of the ISA and at £11k it is too much to pay back into this years ISA. To retain the tax free benefit of your ISA you need to transfer not withdraw.

I realise this may well not apply to you and there could be a good reason to do what you did but others who are less aware may be as frustrated with their bank and withdraw the cash in anger without realising what they are doing.

Thanks Jim.

Just so that it's clear the withdrawal was to pay a lumper off the mortgage. Though I appreciate and acknowledge would you've said.

Others to clear up on;
1. "trick" maybe a harsh word to have used but as point 2 will confirm then this is why I felt tricked.
2. As mentioned in op, I had a meeting in the bank to discuss finances. One specific area was regarding our isa's, mine and the wife's. We had received letters ref 'end of bonus' so this conversation was to confirm we wished to continue with the cash isa with the best current rate for another 12 months. What's happened is the person I spoke with did not do her job and hence I felt it was a trick or a ploy not forgetfulness to not setup new product on isa.

opinions4u

Markie11 wrote: »

2. As mentioned in op, I had a meeting in the bank to discuss finances. One specific area was regarding our isa's, mine and the wife's. We had received letters ref 'end of bonus'

So they do send letters. Thanks for confirming it.

so this conversation was to confirm we wished to continue with the cash isa with the best current rate for another 12 months. What's happened is the person I spoke with did not do her job and hence I felt it was a trick or a ploy not forgetfulness to not setup new product on isa.

And in that context I totally agree. The staff member should have organsied the most suitable account for your needs.

Thanks.

crittertog

opinions4u wrote: »

But were they advised when they took the account that the rate would drop to x.x% after 12 months? If so, they were given a year's advance notice.

HUMBUG wrote: »

My pensioner parents weren't sent a letter advising reduction in interest rates for their cash isa . Apparently this is something they must do according to the fsa (who I contacted at the time a year ago).

Assuming, of course, that the rate change was due to the expiration of a bonus, rather than the FSA requirement to notify when the underlying basic rate changes by more than a set amount relative to the BoE base rate ... (I'm unfamiliar with Lloyds' accounts, but HUMBUG didn't mention a bonus..?)

Markie11

They use the term 'Tricked'. I know it's not quite the same storyline but just goes to show that these high street banks can be underhand

http://www.thisismoney.co.uk/money/saving/article-2039249/Nationwide-using-dirty-trick-steal-savers-interest.html?ito=newsletter