National Savings announce 'savage cuts' to interest rates...
Posted: 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.