Tue Sep 22, 2020 7:31 pm
The Treasury's bank will cut easy-access and fixed-rate deals from November
There are fears that a recent recovery in savings rates could be thrown into reverse after National Savings & Investments today took a wrecking ball to its accounts, with 'absolutely savage' cuts to come into force in November.
The Treasury-backed bank this morning announced that from December the odds of winning anything in the Premium Bonds draw will go from 24,500 to one to 34,500 to one, and the estimated number of total prizes won reduced by 1million.
NS&I will also take the knife to its other market-leading accounts from 24 November, with its Income Bonds to go from paying 1.15 monthly interest to just 0.01 per cent, the same pitiful rate paid by Britain's biggest banks.
Its Direct Saver will pay just 0.15 per cent, down from 1 per cent now, and its Direct Isa 0.1 per cent, down from 0.9 per cent.
Its fixed-rate accounts will be also be cut further, as those cuts did go ahead as planned in May, but this will not affect savers until their terms come to an end.
The record amounts saved over the lockdown months and largely deposited into NS&I has resulted in the Treasury-backed bank announcing cuts far heavier than what it had initially announced in February.
NS&I's cuts mean that far fewer Premium Bond prizes will be won despite there being more Bonds in the draw than ever before, reversing a recent trend where NS&I has had to add the number of non-£1million prizes to keep the effective prize fund rate at 1.4 per cent.
Tue Sep 22, 2020 7:34 pm
Sun Sep 27, 2020 4:34 pm
National Savings & Investments plunges into meltdown – hitting savers with delays just as rates tumble
National Savings & Investments has been hit by a customer service meltdown, The Mail on Sunday can reveal. We have been bombarded with emails and letters from customers who are at their wits' end after tortuous dealings with NS&I call centres.
Many staff are understood to be working from home as they deal with a huge backlog of cases – and last night the savings organisation admitted it would have to bring in more employees to cope.
Complaints sent to the MoS reveal that savers are:NS&I's service woes could worsen if last week's rate cut announcement leads to a deluge of savers seeking to withdraw their funds.
- Facing delays lasting weeks to withdraw cash from their accounts or top up their holdings;
- Routinely waiting as long as an hour on the phone to get through to call centre staff;
- Having payments mistakenly processed up to three times – and then waiting days to be refunded;
- Left in the dark about bungles that cause their bank account to go overdrawn;
- Fobbed off when they try to access money in a deceased relative's account – even if it had been set aside to pay funeral costs.
But when they call, some customers are being told they cannot even choose to wait to speak to an operator. A recorded message tells callers to go online or call back later, before the call is disconnected.
Derrick Neilson hopes he never has to hear Beethoven's Fifth Symphony blaring from his telephone again. The 72-year-old from South Yorkshire has spent hours on hold to NS&I waiting to speak to customer services about his account.
Sun Sep 27, 2020 5:03 pm
Sun Sep 27, 2020 5:17 pm
Sun Sep 27, 2020 8:01 pm
Mon Sep 28, 2020 5:20 pm
Thu Oct 01, 2020 1:36 am
Rate cuts come thick and fast after brutal NS&I blow
Interest rates are already falling as banks follow in the footsteps of National Savings & Investments.
Last week, the Government-backed provider announced savage cuts to its Income Bonds, Direct Saver and Direct Isa, which will pay just 0.01 per cent, 0.15 per cent and 0.1 per cent respectively from November.
Days later, savers with Marcus easy-access account learnt their rate would drop from 1.05 per cent to 0.7 per cent on October 12.
The personal banking arm of Goldman Sachs blamed market conditions.
Meanwhile, TSB will stop paying interest on its Classic Plus current account as a result of 'the continued low interest rate environment'.
The rate fell from 3 per cent to 1.5 per cent in May. As of December 2, customers will earn zero.
Virgin Money's current account offers the top rate of 2.02 per cent on balances of £1,000.
Nationwide's FlexDirect pays 2 per cent on up to £1,500 for 12 months, as long as £1,000 is paid in every month.
After a year, the rate drops to 0.25 per cent. Coventry Building Society's easy-access savings account offers a top rate of 1.1 per cent.
Rachel Springall, from Moneyfacts, says: 'Generally, the savings market is very fluid right now, so good deals can change within a matter of days.'
Sat Nov 28, 2020 3:24 pm
Sat Nov 28, 2020 3:31 pm
NS&I apologises for delays amid savers' exodus
National Savings and Investments (NS&I) has apologised to savers trying to get through on the phone on the day it slashed its rates.
It said it had faced "extremely high call volumes" with many savers trying to withdraw their money.
It announced wide-ranging rate cuts on its savings products in September, most of which took effect on Tuesday.
The average call waiting time in November was around 19 minutes, NS&I said.
It has asked customers to manage their savings online as much as possible.
As government spending increased to fund the response to the coronavirus crisis, so did the amount that NS&I was asked to raise for the government.
But a surge in demand, as other providers cut rates, meant the generosity of NS&I's rates was subsequently reduced leading to the current exodus.