State savings giant is failing the nation...

VISIT the website of the Government backed National Savings & Investments, as I did last week, and it immediately implores you to discover why you should save with this august organisation.

Nothing wrong with that. At the end of the day, all financial institutions, State or non-State backed, are keen to get our business.

Its sales pitch goes as follows. It is 100 per cent secure unlike rival savings institutions that could fall by the wayside if another 2008-style financial crisis grips the nation, plunging savers into the hands of the Financial Services Compensation Scheme.

A powerful message, of course, but the £85,000 safety net now offered by the FSCS is protection enough for most bank and building society savers (I wish I had the odd £85,000 tucked away).

It also boasts it is ‘open’ at all times with staff on hand to deal with queries every hour of every day. Hardly a unique proposition – a number of banks are open 24/7 – although why anyone would want to speak to National Savings at three o’clock in the morning remains a mystery (any answers, readers?)

In addition, National Savings likes to remind us it is not a bank (that is, it’s more cuddly than nasty) and that it has been around a long time (since 1861, the year when Abraham Lincoln became the 16th President of the United States).

Fine but Nationwide Building Society’s origins go back another 15 years and, of course, it is also not a nasty bank.

But nowhere in this pitch for our money is there a reference to the one single thing we are all desperate to know – whether National Savings’ products are actually worth bothering with. Are they any good?

Safety is fine, accessibility is cool and history is vaguely interesting but these count for nothing if the savings rates on offer are the square root of, well, nothing.

Of course the reason for the absence of this vital bit of information is that rates on National Savings’ curtailed range of products are in freefall.

From this May, interest rates on Direct Isa and Income Bonds are being savaged, from 1 to 0.75 per cent. The rate on Direct Saver is also taking a haircut although a less severe one – from 0.8 to 0.7 per cent.

Even the monthly prizes from Premium Bonds will be squeezed with fewer £50 and £100 wins. Interest rates are no longer a reason to save with National Savings.

Although some financial experts have justified the rate cuts on the grounds that Income Bonds and Direct Isa have been among the best savings buys for a while, I just do not agree. They are unacceptable.

Since Theresa May became Prime Minister in the wake of the Brexit vote, she has made a point of waving the flag for savers whose interest payments have been mauled by record low interest rates. Last October, she pledged to help savers who have ‘found themselves poorer’ since the financial crisis while those with mortgages have ‘found their debts cheaper’.

A change in the tide then seemed to be set in motion a month later when the Chancellor of the Exchequer announced in the Autumn Statement that National Savings would be launching a new three-year fixed rate bond this spring paying 2.2 per cent or thereabouts. That was until we learnt that the maximum holding would be capped at a modest £3,000.

May should stick to her pledge to help savers by now getting new National Savings boss Ian Ackerley to reverse these latest rate cuts. Frank Field MP, chair of the Commons Work and Pensions Committee and a champion of savers, said as much last week when he said there was ‘a growing gap between the Prime Minister’s rhetoric and the way savers are treated’.

At the same time she should also urge Ackerley to take a good look at the new investment guaranteed growth bond and see whether it can be made a little sexier before it is launched.

I know a maximum holding of £30,000 – ten times the proposed maximum – would go down a treat with most readers of The Mail on Sunday, as would an option for savers to receive a regular income rather than have to wait for three years to receive the fruits of their savings. After all, it is income most savers crave from their cash deposits.

Prime Minister, it is not good enough for National Savings to be simply a trusted brand. It also has to offer savers an excellent deal.

It is time, I feel, for you to let Ackerley know that he has to start delivering. And Prime Minister, you recently talked about the Just About Managing (JAMs) – now let them do more than ‘just about manage’ their money.

It is not good enough for National Savings to be trusted – it has to deliver, too