Britannia International, which is part of the troubled Co-operative Bank, announced earlier this year that it is to close down in the Isle of Man and as part of the wind down, is gradually reducing interest rates to encourage savers to take their money elsewhere. Those with fixed rates aren’t affected: their accounts will continue to pay the same rate until maturity.
But the variable rate accounts need to be closed this year – and if savers do not act, then their accounts will be automatically closed on February 28 2015. However, it makes little sense to wait until the last gasp as such a small amount of interest is being paid now – and by July 8 no interest at all will be paid on any Britannia International variable rate accounts.
With effect from May 6, the Easy Access account will no longer pay interest. The rate fell to 0.1-0.25pc on April 7 from 0.1-0.5pc previously. Those with the Britannia’s Access Plus account will from May 6 earn between 0.2-0.25pc. The previous rates were 0.45-0.75pc effective from April 7 and before that the rates were 0.95-1.25pc. That means a massive percentage point drop in a short period for savers. But it’s only going to get worse: from June 5, no more interest will be paid on this account.
Regular Saver’s rate from May 6 falls to 0.5pc – it was 1.5pc in March and fell to 1pc in April. From June 5, no interest will be paid. Rates on the 60-Day Notice account drop to 0.7-0.9pc on May 6 from the previous rates of 1.21-1.4pc. On June 5, the rates fall to 0.2-0.4pc and from July 8, no interest will be paid. Rates on the 90-Day Notice account drop to 0.1-1.25pc on May 6, then to 0.1-0.5pc from June 5 followed by nil from July 8.
Those with the Top 5 Tracker will, from May 6, earn between 0 and 0.25pc. Anyone with the Deferred Interest Tracker will suffer a drop from 0.75pc to 0.25pc on May 6 then zero from June 5. All other personal accounts have already fallen to 0pc.
Savings with Britannia International remain covered by the Isle of Man Depositors’ Compensation Scheme which means the first £50,000 is protected. If two or more individuals share a joint account they are both covered up to £50,000.
Britannia International’s owner Co-operative Bank has also recently closed down its Guernsey branch (co-operativebank.co.uk/offshorebanking). All accounts were closed as of April 11 – any savers who had not moved their money will now have to contact Butterfield Trust (Guernsey) which is administering any outstanding balances, on +44 (0) 1481 711521.
As well as these two closures, the Gibraltar branch of Norwich & Peterborough Building Society (which is part of the Yorkshire Building Society) is being shut down. All variable accounts will be closed by the end of this year, while fixed rates can continue until maturity (gibraltar.nandp.co.uk).
Because the Gibraltar branch is part of the UK building society, monies are protected by the UK protection scheme. This means that savers are covered by the Financial Services Compensation Scheme – guaranteeing funds up to £85,000: £35,000 more than covered by the offshore schemes in the Isle of Man and the Channel Islands.
source: Telegraph