M&S withdraws ISA

Struggling retailer Marks & Spencer has taken its mini-cash ISA off the market for new customers.

14:30 09 May 2004

Struggling retailer Marks & Spencer has taken its mini-cash ISA off the market for new customers.

The savings account, launched just 12 weeks ago, proved popular with savers as it guaranteed to pay interest at 0.5 per cent above the Bank of England base rate.

As a result of this week's rise in interest rates, M&S is now paying out interest of 4.75 per cent on savings. Analysts predict that the Bank of England will introduce a further rate rise in the next few months.

Existing ISA customers are guaranteed the advertised rate of interest until at least next April.

A spokesman for M&S told the BBC that the ISA had proved more popular than predicted and no new customers would now be accepted.

Meanwhile, M&S is also planning to withdraw its chairman Luc Vandevelde following disappointing sales.

The company has reportedly hired headhunters to replace Mr Vandevelde, according to reports in both the Sunday Times and Sunday Telegraph.

Sources suggest that an announcement could be made as early as Monday.