Woolwich Reserve Account – Interest Rate Not Clear

houseatreides

Hi All

Ive had a Woolwich (now Barclay) Mortgage with a linked Reserve Account since April 2007.

I have consistently used the Reserve Account over that period as an ad-hoc “buffer” – for example I used it pay for my wedding and paid it off over the next few years as I believed it was at a preferential rate. The total amount has varied over the years but has been around £10k most of that time and peaked at £25k for a few months.

I had always assumed the interest rate on the Reserve was the same as on the mortgage until I called Barclays today. I had a look at the offer letter and it doesn’t reference the Reserve interest rate and my mortgage annual statements until October 2010 don’t include any reference to the Reserve account. From October 2010, there is a paragraph hidden away on the last page which states its at the Barclays Standard Variable Rate but doesn’t state the specific interest rate. I know I should have read the letter fully, but I was more concerned about the mortgage rate as that was the purpose of the letter.

My issue is that nowhere on the website or on the monthly statements can I see what the actual rate for the Reserve was/should be. There is no explanation, no "Interest Rate" field, reference to the SVR, link to specific FAQS or an easily found entry on their website to explain the rate when signed into my account. The only rate I can find is when I click on my Mortgage account, hence why I mistakenly thought the Reserve Account rate was the same.

Further, on the monthly paper statement for the Reserve Account, it only shows the interest being charged with no explanation of how it was calculated or the rates involved.

Finally I can’t find any correspondence from Barclays to let me know that the interest on the Reserve was changing when their base rate varied and the effective date. I did get a letter to say that the interest rate on the mortgage was changing (and it stated the old and new values) but no-where on that document does it mention the rate for the Reserve Account or that it was changing.

Under the Banking Code isn’t there a requirement on the bank to be transparent on what rate is being charged and to communicate changes in a durable format?

Had I known that it was at the SVR I would have taken out money from a credit card at 0% for a few years or a loan as Ive got an excellent credit rating.

I know that Barclays are in trouble over these legacy Reserve Accounts as it does seem to have been a bit of a train wreck from the start.

Do you think I have a case to challenge Barclays about the incremental cost to me? Any advice on the approach I should take?

Any advice gratefully received.

getmore4less

It was clear on the website when I got mine.
And in the terms and conditions that came with the mortgage


Offset same rate as the mortgage.

Not offset SVR.

Interesting point

I to do not recall any interest rate change information for the mortgage reserve account.

I have an offset so the mortgage rate change was probably sufficient.

getmore4less

Still there on the barclays site

https://www.barclays.co.uk/help/mortgages/reserve/how-does-it-work/#back=%2Fcontent%2Fbarclaysuk%2Fen%2Fhelp%2Fresults.html%3Fq%3DMortgage%2Breserve%26_charset_%3DUTF-8%26offset%3D0%26origin%3Dhelp.barclays.co.uk

For Woolwich flexible mortgages, interest is charged on a Mortgage Current Account at the Bank of England Base Rate + 4.49%, except for Offset mortgages, where interest is charged at the Offset mortgage rate. For Offset mortgages only, interest due on a Mortgage Current Account is charged to the Main Mortgage account (for interest calculation purposes).

houseatreides

Thanks. Im going to do a SAR to see what was in the original documentation. Obviously whats on the website now wont reflect what was available online in 2007 (took the mortgage out in person at their Manchester branch).

For me, I still think the lack of any notification/availability of what rate is being applied to the Reserve Account is the key issue - specifically when the rate changed.

getmore4less

I agree those with regular mortgages should have been notified of the rate changes on the reserve account.

I kept every bit of paperwork when I got mine.
Marketing and T&C every statement, monthly on offset.