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NS&I rate cuts take effect from today
National Savings & Investments has slashed the interest rates it pays on a raft of savings accounts, with some accounts now paying just 0.01%.
The rate cuts were announced in September and come into force from today.
NS&I’s Direct Saver, a previous best buy, now pays just 0.15%, down from 1% AER. NS&I’s Investment Account pays 0.01% from today, a reduction from 0.8%. Income Bonds also pay 0.01%, down from 1.16%.
NS&I’s Junior ISA now has an interest rate of 1.5%, down from 3.25% AER.
In addition, the odds of any £1 Premium Bonds number winning any prize will tumble from 24,500 to one, to 34,500 to one from the December draw.
Kevin Brown, savings specialist at Scottish Friendly, said: “Today is the day that many savers will have been dreading, as NS&I slashes the rates on its premium bonds and range of saving products.
“Up until now, the Treasury-backed bank has offered some solace to savers as it’s maintained rates while many banks and building societies pulled back from the market following the Bank of England’s decision to reduce interest rates to 0.1%. NS&I experienced five consecutive months of record purchases of Premium Bonds and savers poured money into accounts as its rates edged towards the top of the best buy tables.
“But with options for savers now limited, it could be a good time for people to review their finances and make decisions on how they can potentially make their money work harder. This might involve shopping around for market-leading rates or choosing to prioritise paying off debts, as interest rates on credit repayments are likely to exceed interest earned on cash savings.”
Adrian Lowcock, head of personal investing at investment platform Willis Owen, said: “NS&I rate cuts come into force today and this is another stark reminder to savers on the importance of proactivity to benefit from the best possible returns. Using a savings platform is an easy option for people looking to compare rates across different providers.
“Savers flocked to NS&I during the height of the pandemic and demand was pushed to breaking point, so it was a case of when rates would drop, not if. Think ahead of the game and take control of your savings and investments to make your money work harder for you.”
