How one of Britain's oldest banks abandoned the high street

Barclays was a familiar sight on Britain’s high streets for centuries, and the business still claims that service is at the heart of its core values.

The bank insists that “putting the people and businesses we serve at the centre of what we do”.

But Telegraph Money analysis today reveals that the bank has shut more branches than any other and has been the slowest bank to pass on interest rate rises to easy-access savers. As a result, its popularity amongst customers has waned.

Barclays has closed 961 branches since 2015, according to consumer group Which?. This puts them far ahead of any other high street bank. Since January 2019, the company has announced 600 closures, over 260 more than TSB, which has the second-largest number set to close.

Although Barclays is not alone in the sector for slashing its high street presence, campaigners say the company has been steadily announcing several ‘regular batches’ of closures a year – totalling up to nearly 1,000 closures.

Derek French, veteran community banking campaigner, said: “They just sort of slip by on the blind side and you don't realise how many they're doing unless you’re somebody like me or Which? who collate the figures.”

It comes as there is increasing concern over banking services vanishing from high streets, and leaving the elderly and vulnerable without access to basic banking services and access to cash.

Barclays has also been criticised for scaling back staff in its branches and pushing customers to use online banking. At the end of 2021, large signs were erected in around 500 Barclays branches ordering customers to use self-service machines inside the store, rather than approaching a staff member.

The signage told visitors: “Look out for changes to banking in branch. For everyday banking, you'll now need to use our self-service machines, the Barclays app or online banking.”

In August of that year, leaflets appeared in a London branch asking those taking out less than £300 in cash to go to a machine rather than a counter.  Even those customers who are fortunate enough to have kept their local Barclays are not guaranteed a staffed service from 9 to 5.

Barclays says that just 2pc of its branches are now without a staffed counter, but Mr French said that there are several branches where counters closed at 2pm.

Savings Slump

Interest rates increased rapidly in 2022 as the Bank of England raised the Bank Rate by more than three percentage points over 12 months.

But analysis reveals that Barclays was the slowest high street provider to increase rates for easy-access savers. Its Everyday Saver account paid an interest rate on balances less than £50,000 of just 0.01pc until last September – nine months after the Bank of England first increased the Bank Rate.

Meanwhile Halifax, Lloyds, Santander and NatWest all bumped up their interest rates on easy access savings from 0.01pc in April, and HSBC did so in March, according to data from Savings Champion.

Barclays did launch a Rainy Day Saver account in September, which offers 5pc interest on balances up to £5,000, but this is only available for Blue Rewards customers - who must pay a £5 monthly fee.

Anna Bowes, co-founder of Savings Champion, said that Barclays was still holding back from passing on interest rises to their customers.

She said: “We know that the high street banks pay some of the worst savings rates to their long-suffering customers, but in a year of rising interest rates it has been shocking to see how slowly some of them have passed on the good news.”

And she added: “Today, although the Bank Rate has increased by 3.4 percentage points, savers in the [Barclays] Everyday Saver are still earning only 0.50pc - an increase of just 0.49pc.

“What makes this behaviour even worse is that if the banks have any excess cash that is not used for lending or capital purposes, they can use the Bank of England as a piggy bank and earn Bank Rate – so currently 3.5pc.

“It’s clear that the banks will not help their customers – so savers need to help themselves to make sure they are earning as much as possible.”

The cost to customers

A customer who had £50,000 of savings in a Barclays Everyday Saver last year, would have earned £67.07p of interest – the second-least generous offering of the major banks, according to calculations by Savings Champion. Savers with the same balance in equivalent accounts at Halifax, HSBC and Natwest all earned in excess of £110.

Customers are also unhappy. Consumer campaign group Fairer Finance saw the bank's rating by savers fall over three consecutive periods last year.

Fairer Finance tables take into account consumer polling, complaints (based on Financial Ombudsman uphold rates), transparency, and terms and conditions. Its findings show that across bank accounts, savings and mortgages, Barclays has tanked over the last year in the view of its customers.

James Daley, of the ratings agency, said that Barclays trailed behind other banks in their efforts to improve service levels for customers.

He said: “It’s no wonder that Barclays savings customers are less happy than most - given that Barclays has taken advantage of the rise in interest rates to reward shareholders rather than customers.

“More broadly, it seems that as other banks have upped their game on service over the last few years, Barclays has stagnated or even deteriorated in some product areas - and is consequently going backwards in our customer experience ratings.”

Complicated Small Print

The terms and conditions for Barclays mortgages are “the worst in the sector”, according to Fairer Finance. This is because they demand a reading age of 29, when the average among lenders is approximately 16 years.

Mr Daley said that Barclays had made it clear that its priority was “to maximise profits for shareholders - not deliver the best outcomes for customers” and said “there’s a lot of work to do” ahead of new legislation from the Financial Conduct Authority (FCA), the city watchdog, coming into force later this year.

The FCA’s new Consumer Duty will require firms to make it easy to switch or cancel products, provide helpful and accessible customer support, and stop “burying key information in lengthy terms and conditions that few have time to read”.

Alongside the Financial Services and Markets Bill currently being debated in parliament, aiming to tighten protections for access to cash, the FCA appears to be clamping down on high street banks.

A Barclays spokesman said: “Our customers’ behaviour has changed significantly in recent years, with the majority choosing online banking. As we adapt, we are evolving our physical presence whilst investing in brilliant customer service and digital technology. Whenever we close a branch, we open a Barclays Local in the community so customers can still access colleagues in-person.”