The withdrawal of Barclays Premium Safe Deposit box service is likely to cause a headache for those with precious metals stored in their deposit boxes writes Jon Hunt of BullionSupermarket.com.
At the end of last month, Barclays sent letters to customers of its Barclaysafe Premium service, advising them that "it has become increasingly complex and costly to continue providing this service".
The Barclaysafe premium service had until its withdrawal, provided a convenient, simple and above all insured (up to £50,000) storage for valuables. Safe deposit box storage of precious metals is believed to be a popular use of the boxes.
Users of the service have been given until the end of October 2012 to either remove their box contents, or transfer their premium service to the "standard service" intended for documents (though one presumes not Bearer Bonds!).
The cost of the service had been £40 per quarter plus £5 each time you accessed the service. The box access procedure requires 24 hours notice to the bank branch to access your box. When accessing your box at a branch, your identity is verified, your box fetched from the vault, and you sign to verify the 2 plastic numbered security seals on your box are correct. Before returning your box to the vault, 2 more seals are then recorded on paper to replace the ones removed.
It is known from first hand experience however, that bank branch staff sometimes show inexperience of the procedure, and it is seems likely that administration errors with seal numbers could potentially leave the bank on the hook for box contents and may well have been part of the reason for the service withdrawal.
Whatever the reason, the withdrawal of the service is likely to cause a headache for those with valuables such as physical precious metal in storage. With safe deposit services in high street banks in the UK mostly full, the problem for physical precious metals holders is where now to store their bullion.
For some, home storage will be an option. This may be fine for holders of a few sovereigns, but holders of more significant amounts, may not feel comfortable with that kind of bullion under their roof. Many may be forced into more expensive specialist deposit box services, with all the associated problems of which firms to trust. For others, they may be forced to sell their physical holdings with a view to transferring them into allocated services such as BullionVault or Gold Money, or even moving out of the bullion asset class all together.