Investor stampede kills off Barclays Tax Beater

Investor stampede kills off Barclays Tax Beater

Barclays has quietly pulled its market-leading cash Isa after being swamped by applications it says are taking up to two months to process. The bank said this week that its Tax Beater Isa that originally paid 6.31% was taken off the market last week.

After a number of recommendations in the press and a television advertising campaign, in less than three months the company had received 10 times the number of Isa applications it usually received in a year. Unsurprisingly, it has been struggling to cope with demand.

Staff in branches are reporting delays of between six and eight weeks before application forms are processed and cheques are cashed. Anxious investors have been calling the bank to find out why their payments haven't been taken. "The Tax Beater Cash Isa has been hugely popular and has flown off the shelves, especially in the build-up to the end of the tax year," a Barclays spokeswoman said.

"In light of this, applications have taken longer to be processed, we are working hard to ensure these accounts are opened as quickly as possible.

"Customers will not lose out. All interest calculations will be backdated to the date the application was stamped."

With Barclays out of the best-buy game, where else should you head if you're looking for a tax-free home for your savings?

Two cash Isas stand out. Both Egg and National Savings & Investments are currently paying 6.05%. Egg's Isa is promising to match the Bank of England.....continued below

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base rate, now 5.5%, for as long as you keep your money in. NS&I is promising to beat the base rate by 0.55%, but only until April 5 2008, when it reserves the right to review the rate paid.

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