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One week left for Claro Money users to withdraw funds

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10/08/2022
Claro Money customers have just a week to withdraw funds before accounts are closed which could result in ISA cash losing its tax-free status.

Last month, the financial wellbeing provider confirmed it suspended its flagship iOS app as it looked to “refocus” with the launch of a new web-based platform next year.

Its community of 45,000 users were informed they would need to withdraw funds by Wednesday 17 August as it no longer accepted customer deposits, it ended its 2% cash campaign, and cancelled its free coaching calls.

Up until 17 August, client money is protected by the Financial Services Compensation Scheme (FSCS) with funds held in a separate NatWest account.

If you are a customer with either a General Investment Account or an ISA, here’s what you need to know, and do:

General Investment Account

Funds need to be withdrawn from each of the ‘goals’. Investments will be sold and the money transferred to the bank account registered with Claro Money at the time. There will not be a charge for this.

ISA account

Customers have the option of withdrawing funds and closing the ISA, or they can transfer their funds to another ISA provider.

If Claro Money fails to hear from customers about what they want to do with their ISA, it will liquidate investments and return funds to the nominated bank account given at the time of registration.

As such, ISA customers who do not actively move or transfer their ISA funds will see their cash lose its tax-free status. This is because the money will be removed from its protective tax-free wrapper as it’s passed to a standard account.

Withdrawals take four working days to process so factor in that time. After 17 August, Claro Money will close all accounts. And direct debit mandates will also be cancelled after this date.

In a letter last month from the CEO of Claro Money, giving customers 30 days’ notice to close their accounts, Rob Brockington, wrote: “Over the past two years we have been on a mission to empower people to achieve their goals through educational content, expert financial coaching and helpful tools.

“We want to continue with our bold mission to address the advice gap and are making some changes to how we do so. We have decided to refocus our efforts where we can have the biggest impact on our customers’ financial wellbeing by delivering financial coaching, courses and other educational resources via their workplace. This means launching a new web based platform early next year with the best quality content, education and tools.”

Last week Claro Money launched financial coaching packages for employers to help workers amid the cost-of-living crisis.

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