iNVEZZ.com, Wednesday, November 26: Lloyds Banking Group (LON:LLOY) has announced plans to simplify its savings account offering and replace 47 “historic” savings accounts with just three.
The old accounts, offered under the Group’s Lloyds, Halifax and Bank of Scotland brands, will be consolidated into instantly accessible Isa accounts, easily accessible online savings accounts and easily accessible accounts, all of which will pay interest at 0.25 pc – in line with competitors’ offers, Lloyds said. However, one third of customers who hold money in any of the 47 accounts will lose income due to the interest rate cuts.
The savers most affected by the changes would lose 25 pence a month in interest if they had £1,000 in savings. Since the average customer has £4,000 in savings, this means a loss of £1 per month. However, Lloyds has found that two thirds of savers will benefit as they currently earn less than the new flat rate of 0.25 per cent.
A Lloyds spokesman said, as quoted in the Telegraph today: “We are starting to simplify our savings accounts. Providing our customers with a simpler range of accounts means that they can make the most of their savings in a simple, clear and easy way”. He added that the Group would write to all affected customers at least two months in advance and that all withdrawal restrictions would be lifted, allowing savers to move to another account if they so wished.
Anna Bowes, director of the savings advice website Savings Champion, commented on Lloyds’ move: “As the number of so-called legacy savings accounts has increased over the years, more and more providers have simplified their offering and reduced the number of accounts by at least half. She added, as quoted by This is Money: “However, not all savers will be happy that many accounts have experienced or will experience a tariff reduction.
*h*analysts on Lloyds share price*h*
At 14:25 GMT the Lloyds share price was 0.10 percent lower at 79.51 pence.
Of the 25 analysts who forecast 12 month price targets for the FTSE 100 listed bank in the Financial Times, the average price target is 86.00 pence, with a high estimate of 115.00 pence and a low of 55.00 pence.
According to the FT, the consensus forecast of the 54 investment analysts surveyed who cover Lloyds is that the company will outperform the market from November 22nd 2014.
At 15:11 GMT on Wednesday 26 November, the Lloyds Banking Group share price is 79.56 pence.