Savers stash vast sums in NS&I bonds

SAVERS ploughed £11.8 billion into National Savings & Investments (NS&I) deals in the year to March 31, figures released last week show.

Over the next 12 months, NS&I is aiming to bring in £13 billion.

Premium Bonds, Income Bonds and the Direct Saver account were the winners. Punters put £7.7 billion into Premium Bonds, bringing the total in them to nearly £70 billion.

NS&I pay out 1.15 pc of the money held in the bonds to savers each year in tax-free prizes — including two monthly £1 million jackpots. The odds of each £1 bond winning are 30,000-to-one each month.

Income Bonds — popular with pensioners seeking monthly income — attracted nearly £6 billion. These pay 0.75 pc each month and you have easy access to the money. The Direct Saver easy-access account at 0.7 pc pulled in £2.2 billion.

Savings Certificates were the losers, with £3.5 billion taken out of these tax-free, fixed-rate deals.

There is no news as to how the new Investment Guaranteed Growth Bond is selling. It pays 2.2 pc for three years on a maximum £3,000.

The bonds went on sale in April to help those affected by low interest rates. But since they were announced last autumn, inflation has reached 2.9 pc, so savers see their spending power fall by 0.7 pc a year.