Ever since the financial crisis began rocking the world in 2008, there have been repeated calls to reduce the power of the most influential high street banks in Britain. Between them, HSBC, Lloyds, Barclays, Royal Bank of Scotland and Santander have 85% of all the current accounts in the UK and are far and away the leading providers of savings accounts and other financial products.
Despite this, Barclays have now begun a plan to buyout ING, adding the group’s customers to its own and making it an even bigger organisation with greater sway and power. In a time that many people are calling for the big banks to be broken up and the market to be opened up for smaller contenders, this goes right against all of that.
The biggest worry is that ING will no longer offer the same savings rates it does once it is under Barclay’s control. Currently, ING has some of the best savings accounts available and regularly appears as a name that savers can trust and should look into. Barclays, on the other hand, is known for its poor savings rates, particularly those it offers online.
Although Barclays have promised they will honour all the current agreements that ING customers have for their savings accounts, it is unlikely that new customers will enjoy the same rates or benefits.
The head of banking at MoneySupermarket, Kevin Mountford, summed up the current situation rather well in a statement, saying that although this did decrease competition, it could help Barclays customers in future: “Although ING Direct customers will switch over to Barclays on the same terms when the deal completes next year, there is no guarantee that they will remain on these terms in the long term, as Barclays is not known for competing for best-buy positions on savings. However, Barclays may use the deal to improve its online offering, upping the ante in the savings market in a similar way it has used the Woolwich brand for mortgages. Only time will tell.”