Nationwide locks out lower income earners from best buy ISA

The largest building society in the UK has been faced with withering criticism for locking out lower income earners from its best buy 4.25 per cent ISA, even when they’ve been loyal savers for years or even decades.

Nationwide recently unveiled its new 4.25 per cent Flexclusive ISA in an effort to finally put an end to the tax-free savings wars.  The closest any competitor comes to matching the new Nationwide rate is a 3.5 per cent cash ISA offered by both Cheshire Building Society and AA Savings.

The new Nationwide offering is not available to the general public, but only to existing current account customers, giving many the impression that the high interest rate acts as a reward for loyalty.  However, in order to further qualify for the account, customers have to be making a minimum of £750 in deposits into their current account every month – a figure which precludes some of the most loyal building society customers due to low income.

While none have argued that Nationwide should not place terms and conditions on such an excellent offering, there have been some building society customers that have been infuriated by being locked out of the deal simply because there’s no way they could make enough money to qualify.  These long-time customers, which have been holding current accounts with Nationwide for decades, feel cheated by their banking provider.

These customers may have a point, industry experts say, especially if the new Flexclusive ISA is meant to be seen as a reward for loyalty.  Keeping an account for 25 years with the same banking institution is usually seen as more of a boon to a bank or a building society than putting £750 into a current account for a few months in a row, yet Nationwide executives fail to see the logic in such a statement.

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