NS&I fails to pass on full rate in­crease to savers

The Sunday Telegraph - Money & Business - - Fame & Fortune - Adam Wil­liams

Savers with Na­tional Sav­ings & In­vest­ments have been left dis­ap­pointed after the gov­ern­ment­backed or­gan­i­sa­tion de­cided not to pass on the full 0.25 per­cent­age point rise in Bank Rate to its cus­tomers.

From Oct 1 the in­ter­est rate payable on NS&I’S In­come Bonds will rise from 1pc to 1.15pc. Savers with an In­vest­ment Ac­count will see their in­ter­est rate in­crease from 0.7pc to 0.8pc, while the Di­rect Saver’s rate will rise from 0.95pc to 1pc.

Fol­low­ing the pre­vi­ous Bank Rate rise, in Novem­ber 2017, NS&I boosted the in­ter­est rates on all three ac­counts by the full 0.25 per­cent­age points. De­spite an­nounc­ing that rates would in­crease marginally on th­ese three ac­counts, other NS&I cus­tomers will ac­tu­ally see their in­ter­est rates cut in the near fu­ture.

The in­ter­est rate on the flag­ship Di­rect Isa will drop from 1pc to 0.75pc on Sept 24.

NS&I said that be­cause of its unique po­si­tion of be­ing owned by the Govern­ment it had to bal­ance the needs of in­di­vid­ual savers, tax­pay­ers and the wider sav­ings mar­ket when de­ter­min­ing its in­ter­est rates.

Anna Bowes of Sav­ings Cham­pion, a com­par­i­son ser­vice, said: “This muted re­sponse from NS&I was ex­pected. This fol­lows the news in June that the amount you can in­vest in NS&I’S Guar­an­teed Growth and Guar­an­teed In­come bonds was to be re­stricted to no more than £10,000 per per­son from its pre­vi­ous ceil­ing of £1m.”

Ms Bowes said savers should in­stead con­sider higher in­ter­est rate ac­counts such as Coven­try Build­ing So­ci­ety’s Lim­ited Ac­cess Saver. This pays 1.4pc, but hold­ers are re­stricted to three with­drawals per year.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.