Relief for savers as NS&I opts not to cut rates

Adam Williams HARD-PRESSED savers have been given a welcome boost as National Savings & Investments (NS&I) axed plans to reduce interest rates and slash returns on Premium Bonds.

The state-owned bank was due to lower rates on a string of variable-rate savings accounts on May 1, but has cancelled the changes in light of the coronavirus pandemic.

Bosses said they want to ensure savers are supported during the economic crisis caused by lockdown. It stands in stark contrast to the actions of many high street banks, which have slashed already pitiful returns after the Bank of England base rate was cut to an all-time low of 0.1pc.

The interest rate on NS&I’S Direct Saver was due to fall from 1pc to 0.7pc next month, while Income Bonds would have returned 0.7pc rather than 1.15pc. It had also planned to lengthen the odds of getting a prize from Premium Bonds – which do not pay interest but, instead, give savers a chance of winning between £25 and £1m – from one in 24,500 to one in 26,000.

The effective prize rate would have fallen from 1.4pc to 1.3pc, but this change has also been cancelled.